Three milestones that define a successful online banking relationship

Digital account origination represents the culmination of a series of precise steps a financial institution takes to initiate or deepen a banking relationship.

It’s a first impression that sets the course for a consumer’s interaction with the institution, whether that means years of working together or seconds before the person decides to go elsewhere. Account origination is an opportunity for the institution to immediately build consumer loyalty by showcasing security, operational efficiency and personalization.

There’s a lot riding on that moment. More than 50% of those who start a digital bank account application never finish it, according to The Financial Brand.

How do financial institutions avoid that fate? There are three key milestones that can determine success or lost business.
 

Milestone 1: When the audience discovers the financial institution

Financial institutions often invest heavily in marketing, whether through billboards, traditional and digital ads, or even Little League jerseys. The goal is to create organic growth by helping people recognize the institution, learn more about it, trust it, and explore what it offers and how easy the process will be.

Organic, new traffic to a financial institution’s website represents the largest group of applications across products. Fiserv internal data shows organic traffic accounts for 71% of all applications, which highlights how critical it is to remain relevant to the target audience.

That digital relevance cuts across all age groups, with a nearly 50-50 split between people older and younger than 40, according to Fiserv data. The data also shows more than half of online applications happen during weekdays when the financial institution is open, meaning people are choosing digital experiences over in-branch interactions.

When a financial institution wants to target a certain group of people or geography with a specific product, the right digital and social tools can help. Fiserv recently watched a client’s certificate of deposit (CD) campaign on a rate site. In 17 days, the client opened about 2,000 CDs worth more than $116 million.

Marketing campaigns hold vast potential, but when visitors arrive at a financial institution’s website, they expect speed, ease and the right products.
 

Milestone 2: When interest becomes action

The opportunity for growth appears the instant someone lands on the financial institution’s website. But those visitors know what they want and expect to find it within a couple clicks.

The challenge for the institution is to act quickly to convert all the awareness and marketing impressions into digital loan origination, a deposit account or any other product. The digital origination process is like the first handshake with a visitor, and a firm grip goes a long way.

With that in mind, it’s critical that people face as few hurdles as possible attaining the product they want because if they leave, they might not return. Fiserv internal data has shown that applicants who try once and drop out come back only 8% of the time.

An ideal loan origination, for instance, keeps the visitor on the site and closes with the right offer. It follows the “know me, value me and make it easy” rules.

In practice, that involves the application, real-time anti-money laundering and know your customer checks, a prequalification offer, a real-time credit assessment, a click-to-sign feature, account onboarding and loan distribution in one digital encounter. Behind the scenes, an API integration with the institution’s core and third parties fuels everything from identity verification to instant approval.

The customer or member data the financial institution collects during loan origination presents additional growth opportunities. The better the institution knows the applicants and risk levels, the easier it is to concurrently prequalify them for other products to present during the same interaction.

An adaptive, customizable digital origination keeps people engaged, whether they’re first-time visitors or longtime customers or members.
 

Milestone 3: When customers or members want more

Growth doesn’t stop with the initial origination. Once people enter the digital ecosystem, the same tools as before help institutions offer additional products to grow the relationship.

Existing customers and members represent a smaller subset of overall application volumes, according to Fiserv internal data, but they’re no less important. Still, Fiserv data shows 39% of abandoned applications are from existing customers and members who looked at the available products and dropped off.

Maybe they wanted a CD, and the institution offers only checking and savings. Those people can find what they want elsewhere, and when they leave, there’s always the chance they’ll take all their business with them.

That risk highlights how a full suite of products can create a competitive digital edge. Fiserv data, for instance, shows institutions that offer deposits and loans on average have a 17% lower abandonment rate.

Strong digital strategies rely on an assessment of what the key products are and how they’re presented. That way, when people are ready to add products, the institution is ready to help.
 

High value and lasting relationships

Digital origination is a crucial entry point for financial institutions and a powerful tool for capturing market share.

Successful origination ties together marketing, user experience and product availability. Ideally, the process relies on real-time data to give people what they want as quickly and easily as possible.

Financial institutions that treat digital origination as a core part of the customer experience can position themselves to win more business and keep it longer.