Abstract
Overview
The need for cost-efficient online account opening processes has never been
greater. Consumers routinely conduct banking transactions online at their own
convenience, and they similarly expect to be able to open and fund accounts at
will, quickly and easily, within a single session. Last year, anxious
depositors seeking safer havens for their savings drained billions of dollars
from wobbling banks, providing a dramatic example of how online opening
services can give forward-thinking financial institutions a boost on their
competition. And yet, many financial institutions still rely on relatively
archaic, paper-driven processes that require manual review in the branch. This
report analyzes ten vendors that offer compelling online account opening
products, maps out how such products improve profitability, and examines what
banks and vendors identify as the key obstacles slowing adoption of such
products. The report profiles Andera, CashEdge, Fiserv, Jack Henry
(MeridianLink), Metavante, Online Resources, S1 (S1 Enterprise and Postilian),
Parsam Technologies' uMonitor and Yodlee.
Primary Questions
- How many consumers open accounts online?
- What motivates consumers to open accounts online?
- Do financial institutions deliver the service experience that consumers
expect?
- Are online applicants more profitable than consumers overall?
- What is the return on investment from an online account opening process?
- Do banks and vendors see eye to eye on the primary payoffs and obstacles?
- How do large and small financial institutions set strategies for online
account opening?
- What product features are desirable?
- What distinguishes the nine vendors?
Methodology
The consumer data in this report is based on data collected online from a
random-sample panel of 2,350 respondents in March 2008. The overall margin of
sampling error is ±2.0 percentage points at the 95% confidence level.
The survey targeted respondents based on representative proportions of gender,
age and income compared to the overall U.S. online population.
This report is also based on data collected online from a random-sample panel
of 2,339 respondents in September 2008. The survey targeted respondents based
on representative proportions of gender, age and income compared to the
overall U.S. online population. Overall margin of sampling error is
±2.0% at the 95% confidence level.
Table of Contents
- Overview
- Primary Questions
- Findings and Analysis
- Methodology
- Executive Summary
- Key Findings at a Glance
- Key Recommendations
- High Failure Rates Undermine an Essential Service
- It' s a Given: Many Consumers Want to Sign Up Online
- Gen Y Opportunity
- Most Online Applicants Already are Familiar With the Bank
- Applicants Expect a Quick, Hassle-Free Experience
- Primary Motivations Vary Among Existing, Past and New Customers
- The Main Consumer Complaint
- Most Applicants Say Application Process is ' Easy'
- Unlike Consumers in General, Successful Applicants Balk at Visiting
Branch to Confirm Identity
- Female Applicants Encounter More Obstacles
- Females Fail Much More Often Than Men
- Successful Applicants Are More Profitable
- Successful Applicants Use More Bank Products
- Successful Applicants Use All Banking Channels
- Successful Online Applicants Embrace Online and Mobile Banking
- Fees and Lack of Online Services Frustrate Successful Online Applicants
- The Business Case for Online Account Opening
- Bankers and Vendors Agree on ROI
- How Bankers Grade Online Account Opening Products
- The Primary Obstacles - and Why There' s Finger-pointing Between Vendors
and Bankers
- Bankers and Vendors Blame Each Other for Shortcomings
- How it Works: From Application to Funding
- Identity Verification
- Funding Verification
- Data Analysis
- Microdeposit Authentication
- Account Aggregation
- Why Strategies for Large and Small Financial Institutions Vary
- A Checklist of Desirable Features
- Vendor Profiles
- Andera
- CashEdge
- Fiserv
- Jack Henry & Associates Inc. (MeridianLink)
- Metavante
- Online Resources
- S1 Corp. (S1 Enterprise and Postilion)
- uMonitor - Parsam Technologies
- Yodlee
- Related Research
- Companies Mentioned
Table of Figures
- Figure 1: Online Account Opening Process
- Figure 2: Efficiency Cost Savings Gained for Accounts Successfully Opened
Online in 2008
- Figure 3: Opened a Checking Account Online Without Needing to Phone or
Visit Bank
- Figure 4: Last Time Attempted to Open Checking Account Online (All
Consumers)
- Figure 5: Last Time Attempted to Open Checking Account Online (By
Generation)
- Figure 6: Online Applicant Relationships With the Bank
- Figure 7: Consumer Motivations for Applying for Checking Account Online
- Figure 8: Motivations for Applying Online (By Relationship to Bank)
- Figure 9: Consumer Challenges When Opening Account Online
- Figure 10: Ease of Process (By Age)
- Figure 11: Preferences for Verifying Identity When Opening an Account
Online
- Figure 12: Success Rates for Completing and Funding Application Entirely
Online (By Gender)
- Figure 13: Banking Products Currently Used
- Figure 14: Conducted Various Banking Activities in Past 30 Days
- Figure 15: Banking Activities in the Previous Week
- Figure 16: Reasons for Switching Banks (By Success in Funding Account
Online)
- Figure 17: Online Account Opening Cost Savings
- Figure 18: Primary Factors Driving Return on Investment (Bankers vs.
Vendors)
- Figure 19: Biggest Obstacles That Stand in the Way
- Figure 20: Online Account Opening Workflow
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