PROVIDENCE, R.I.--()--Well-educated, high-income consumers and the 18- to 35-year-old members of Generation Y are more likely than others to be comfortable with technology and with conducting the majority of their banking business online. That’s good news for financial institutions that have developed a multi-channel platform that emphasizes mobile and online banking as well as branch and call center delivery, according to The Future of Account Opening, a new white paper from Andera, Inc.
The paper draws on research by firms such as Javelin, CorePROFIT Solutions, McKinsey, and Aite Group, as well as on Andera’s extensive trove of in-house data from more than 29,000 checking account applications. It shows that online account opening can lower banks’ costs of acquiring and servicing customers by up to 50%. Relationships with such customers tend to be more profitable, to include a variety of products and services, and to last longer because they are established earlier in the customers’ careers.
While many financial institutions surveyed by Andera last year indicated an intention to establish or promote online account opening, most of the respondents have not yet put those plans into action. Such delay puts those institutions at a disadvantage, because consumers are rapidly becoming comfortable with conducting business of all types electronically rather than at brick-and-mortar locations.
In a recent press release, Andera revealed that use of the mobile channel in account opening at its 15 largest clients had tripled over the last two years. This latest report also notes that online account opening platforms allow for automatic prequalification of applicants for additional services, paving the way for a more thorough job of cross selling than branch or call center personnel usually perform.
Additional topics discussed in the report include:
- discussion of differences in IT spending by high-performing banks vs. other institutions.
- comparisons of demographic information – age, income, and educational levels – of online account opening customers and the general population. Information drawn from data on more than 29,000 applicants using Andera software.
- differences in costs of opening and servicing various types of accounts, from analysis by CorePROFIT Solutions.
Andera will make a copy of the full report available to participants in the company’s upcoming webinar, Why Online Applicants Can Be Your Most Profitable Customers, on Wednesday, October 10, from 2:00 to 3:00 p.m. Eastern time.
Andera pioneered online account opening in 2004, growing to over 550 bank and credit union customers while building out the infrastructure to integrate with dozens of industry systems. They led the way in helping financial institutions acquire customers online.
Today, Andera’s paperless oFlows platform dramatically simplifies the account opening and lending experience in branches, online, and out in the field. oFlows is optimized for mobile devices and was awarded “Best of Show” at Finovate four times. Andera is headquartered in Providence and has offices in San Francisco and New York.