Attracting New Members: Why Credit Unions Should Offer Mobile Account Opening

By Lou Grilli, Director of Payments Strategy at CSCU

Gain Younger Members With a Streamlined and Digital Friendly Onboarding Process

Mobile account opening is an effective method for credit unions to convert potential applicants to new members. According to a recent report by Javelin Research, when opening a standard share draft account, 70% of likely applicants say they would prefer to submit a digital application. A Mobile Strategy Partners (MSP) study says 12% of all banking customers in the U.S. will switch financial institutions this year. And if you are looking to attract millennials as members, MSP points out that 21% of all millennials will make the switch.

Amazon, Uber, Airbnb have set the bar as to what consumers are expecting when enrolling on a digital channel. The goal of mobile account opening is to make the process and the overall experience as easy and welcoming as possible and to connect with potential members through the digital channels that they prefer. This includes starting the process on one channel (their mobile) and completing the process through another (in-branch) without having to start over.

Make it Easy to Become a New Member

Mobile account opening involves a few key functions which can all be outsourced to a single mobile app, or integrated with the credit union’s existing account opening software and extended to a mobile optimized website. The first of these functions is data entry. It is this step alone that accounts for an 80% abandonment rate. Why? Because most consumers don’t like to enter data. It is tedious and time-consuming. Every phone has a camera. Mobile account opening must eliminate, or at least minimize, data entry which can typically lead to errors. Taking a picture of the front and back of a driver’s license and populating the account entry forms with the license info, after data validation and identity verification, is the first step to attracting millennials. Of course security is still of the utmost importance – no documents should ever be stored on the phone, and data transmission should be fully encrypted.

In a recent case study by Mitek, an industry leader in mobile capture and identity verification software, one of their financial institution clients assigned its sales staff to work a table at a major league baseball game armed with iPads complete with mobile imaging and identification software for financial institutions. The result was an increase by 50% of application approvals due to accuracy in form-fill, elimination of paper applications containing personally identifiable information (PII), and a reduction in falsified applications due to the need to take a picture of identification.

A Mandatory Requirement to Add in 2016

While the case study findings are impressive, mobile account opening should not be thought of strictly as a way to improve workflow. Rather, credit unions need to view mobile account opening as a mandatory requirement and the single most valuable new service for 2016 to convert potential applicants into new members. Over the next few years, we’ll see most existing online account openings being at least started, if not completed, in-app or on mobile-optimized sites. Credit unions that chose not to offer mobile account opening will lose new market share to those who do.

As credit unions embark on membership drives and look to gain younger members, one area to focus is the onboarding process—making it streamlined and digital friendly will decrease abandonments.

Full story in The Payments Review by Lou Grilli.

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Posted in NWCUA.