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Timely & timeless news, research, & financial services industry insights.

January 2021

The key to an engaged relationship?

Money in. Money out.

Banks and credit unions spend hundreds of dollars to acquire a checking account. Yet, acquiring an account is a long way away from scoring a touchdown. That’s because every time an institution opens a new account, they merely earn the opportunity to make or lose money. 

With average first-year attrition rates as high as 40%, friction is the silent enemy. Removing it will mean the difference between a wise investment and a continuous cycle of acquiring and losing business. How can institutions find the winning formula?

What not to do

First, let’s focus on what to avoid: Don’t try to cross-sell before you’ve formed an engaged relationship. Help customers and members fully utilize the accounts they just opened. When they do, they are four times more likely to consider your bank or credit union to be their primary financial institution. The result? They will turn to you when additional financial needs arise.

The key to success

The key to building engaged relationships and achieving primary financial institution status hinges squarely on two factors: Whether customers and members are routinely depositing money into their accounts and whether they are actively spending and paying bills using their accounts.

Our advice for onboarding new checking account openers? Remove friction from the process and remind them to set up direct deposits and update biller information. People are busy, get distracted, and any extra effort required will negatively impact your results. 

Succeeding with direct deposits

One seemingly tiny detail often prevents customers and members from following through in switching their direct deposits: They don’t know their account numbers. 

When accounts are opened online, the number is displayed on the screen and it’s up to the customer or member to write it down. Sensitive data like account numbers cannot be shared over the phone or email, which makes it particularly frustrating for busy people who just want to get the task done and move on.

The Digital Onboarding engagement platform includes a Secure Personalizations Feature that enables banks and credit unions to leverage a light authentication process to securely display sensitive data like account numbers within a personalized microsite. Customers and members appreciate the convenience and customer and member service teams appreciate not having to field calls when they cannot share the information over the phone.

Succeeding with recurring payments

Amazon announced that the 2020 shopping season was the biggest in the company's history. Did your institution reap the benefits or did customers and members make a competitor’s card their default payment method?

Getting your debit and credit cards top-of-wallet at merchants like Amazon, iTunes, and Uber is one of the best ways to ensure that customers and members routinely turn to you for their day-to-day expenses.

The Digital Onboarding engagement platform includes a Card on File Feature that makes it easy for people to update their default payment methods with their favorite merchants. They can update their card with a single merchant or multiple merchants all in one place - without visiting multiple websites to get the job done. Removing friction is the key to success.

In summary

It doesn’t make sense to acquire new accounts if you don’t have a solid onboarding strategy. With average first-year attrition rates as high as 40%, financial institutions need to break the cycle of acquiring and losing business. Your existing customer and member base is one of the most fruitful opportunities for growth.

Learn more about how the Digital Onboarding engagement platform can help.

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