By : Steve Nogalo
Banks are not making the most of the mobile, missing crucial opportunities to capitalize on the channel by cross-selling and completing new product purchases directly from the mobile device.
Data from Digital Insight shows 31 percent of consumers log into their bank's remote services exclusively through a smartphone or tablet, yet promotions for other products are scarcely seen on banks' mobile apps. Banks and other financial institutions need to make mobile work for customer acquisition to maximize revenue from the channel, but this will require changes to processes that are sometimes 20 years old.
For example, fewer than 20 percent of leading US banks currently offer a new account opening process optimized for a smartphone. At present, it’s a pretty cumbersome process not geared to the way in which consumers behave today. Screens are hard to read, consumers are required to bring signature cards and proof of identity to a branch, and mobile deposits are often not supported for new accounts. New account opening processes must improve.
The latest Digital Banking Report notes how mobile device account opening is increasingly impacting branches, too. For example, it’s possible to turn a smartphone into a document and ID scanner with character recognition, replacing error-prone manual completion of forms on a mobile device. Consumers are now very comfortable with the idea of using the mobile phone camera to facilitate banking interactions, thanks to the massive success of mobile RDC, and this technology can be readily applied to other use cases.
Niti Badarinath, senior VP of US Bank, explains in the study: “Imaging features are the most positively reviewed features by customers. Data entry is painful. Every phone has a camera. Customers like convenience and dislike apps that don’t use features their phones have.”
The Digital Banking Report forecasts the number of checking accounts opened exclusively via a mobile device will rise to five million by 2020, up from two million today. Crucially, this will overtake the numbers opened just in a branch, which it predicts to fall from seven million to three million.
Account opening is becoming easier thanks to mobile technology. Mobile photo data capture will reduce the need for paper-based documentation, cutting the time and costs of opening an account.
This is good news for banks. By reducing the friction of a transaction, in the case of opening an account, it’s possible to win new customers more cheaply and easily than before. This could help make mobile a much more profitable channel than it has been so far.