The Revolution of Digital Sales in the Financial Industry
How are banks doing in their ability to acquire customers and grow their product sales through digital channels? The verdict is pretty damning: Banks are failing to convert 85% of customers on digital channels.
Some of the reasons for such numbers are:
Completing an application is time-consuming. According to one case study, opening an account online with some of the traditional banks requires nearly 100 clicks.
The amount of information that’s required from the customer can be pretty insane. For instance, asking for an address history stretching back several years.
An inability to complete the application in stages. When the process takes that long, a customer should be able to pause it and resume later — but very few banks offer this option. What’s more, a customer can rarely start the application on one device and finish it on another. In today’s age of mobile banking, this is a major pain point for modern customers.
A lack of digital ID verification. One of the main reasons customers apply online is the convenience of completing the process from wherever they choose, but a lack of digital ID verification means they still have to visit a branch to drop off paper copies.
Customers seldom get immediate access to their account, even after persevering through the application process. They can’t fund it until it’s open and often have to wait several days for the debit card to arrive in the post to start spending.
Multiple PINs and passwords complicates the login process. Many banks have introduced multi-factor authentication for justifiable reasons, but from a customer’s perspective, simply accessing an account can be stressful.
Limited or difficult access to support. If customers experience issues with their card, they often don’t have many options to resolve issues on their own, through digital channels. That means having to call the provider to report a card lost or stolen, or even to just change spending limits. On top of that, banks don’t provide a quick and easy way to reach their customer support team, such as through a chat function.
The message for banks is a resounding one: if you make it difficult for your customer to open an account, don’t be surprised if they take their business elsewhere.
But digital sales in banking isn’t just about opening a bank account. Once the account is open, the next step is to get your customers to sign up for products with higher profit margins, such as loans.
However, once again, a poor digital experience discourages loan applications, because:
Applying for a loan is frustrating, even for existing customers. Completing an application involves providing financial statements (and sometimes details for different parties) and submitting information the bank already holds.
Customers often have to provide their own credit score. This is especially true for customers applying for a mortgage, for instance. Often that results in the customer having to visit an external site to calculate the score, and then sharing it with the bank — a simple service that banks could easily offer their customers instead.
Loan applications can’t be completed online. As with the onboarding process, this option is rarely available to customers. In fact, many have to go to the trouble of visiting a branch to get it done.
Loans take a long time to be approved. After submitting the application, customers must wait for the loan to be approved and for the funds to land in their account. From start to finish, the whole process could take weeks, or even months.
The race to revolutionize digital sales in the financial services industry is on — and banks are limping behind. Customer expectations have shifted, new regulations are piling on the pressure, and ambitious new players are eager to get a foothold in the market.
The only option left for traditional banks and credit unions is to evolve. But here’s the good news: the same technologies used by challenger banks are available to incumbents, too. The challengers may have raised the bar, but the opportunity is ripe for traditional banks to level the playing field.
Contact us to learn how we can help your business join the digital revolution and prosper on its industry.