It can be challenging for banks and financial establishments to attract new customers, especially using the traditional account opening process. Many people simply do not have the time or patience to drive to the nearest bank, wait in line to talk to a representative, and fill out a bunch of forms to open a bank account.
But thanks to innovations by financial technology (fintech) companies, businesses can now take advantage of Digital Account Opening solutions to enable people to create bank accounts digitally and remotely.
Let’s discuss what digital account opening is, why you should enable it for your business, and the best practices for maintaining it.
Digital account opening allows users to conveniently open a bank account online without visiting a physical office. It is a three-step process that streamlines account creation and customer acquisition. The digital bank account opening method involves three core functions: customer acquisition, origination, and onboarding.
The main goal of implementing a digital account opening process is to empower your consumer base to open a bank account digitally, where they can accomplish it in the fastest, easiest, and most secure manner possible.
With the convenience of digital account opening, more people have adopted it in recent years. In 2022, 13.7% of the U.S. population had a digital-only bank account, with projections stating that by 2025, almost 20% of American citizens will have one.
While many benefits come with integrating digital account opening into your business, the implementation also presents challenges, such as security concerns, technical issues, and problems communicating your company’s services and products.
Although it’s a vast undertaking, digital account opening provides more pros than cons once implemented.
In a nutshell, digitalizing the account opening process makes it simpler for users to open a bank account, which in turn helps banks acquire more customers. As the fintech industry in Southeast Asia remains highly competitive, innovations like digital account opening can help banks and financial institutions stand out and gain a bigger share of the market.
Let’s take a look at the different benefits of digital account opening to businesses.
Get a better digital view of your customer’s data
Today’s customer base not only expects but demands a highly-personalized experience. Implementing a digital account opening process allows businesses to obtain customer data with their consent, which helps personalize their onboarding experience.
Customer data insights allow businesses to optimize their platforms to address customer pain points and provide tailored solutions.
Give users a better experience in the platform by offering regular payment modes
Traditionally, banking activities require long-drawn-out processes, which many customers don’t have the patience for. The digitization of account opening can eliminate these nuisances and enable customers to open a bank account at home using a laptop or smartphone.
Digital account opening allows your customers to fulfill any form of financial transaction, whether depositing, withdrawing, or sending money, whenever and as they see fit. With a guaranteed way to bank anytime and anywhere, most customers will be more willing to do so, which can mean more business for you.
Enable real-time reconciliation of transactions
Implementing digital account opening processes benefit both your customers and your organization. It enables real-time transaction reconciliation, which is crucial in the accounting process.
As your business gains more accounts receivable, payables, and payment channels, reconciling all customer transactions becomes more labor-intensive and complex.
The digital bank account opening process allows you to compare internal and external records to verify data instantly and accurately, removing the hassle of going through information manually.
Disburse loans quickly
Modern customer sensibilities have evolved to the point that every transaction requires instantaneous action—this also applies to banking and loans. With digital account opening, your customers can fill up an application form online, get an assessment, and find out if they’ve secured a loan in a matter of hours.
Over-the-counter processes are no longer a requirement on your company’s end. You can process the transaction and transfer the loan directly to the borrower’s bank account without the customer needing to step into a traditional banking establishment.
Pay out salaries instantaneously
Aside from helping customers, the digital account opening process also helps businesses, particularly in streamlining payroll. This method will allow the people in charge of disbursing salaries to employees to create dedicated accounts for specific departments and send the payments simultaneously.
If you or your clients have a large corporation, digital account opening can make payouts more seamless and efficient.
Micro merchants can now serve rural areas effectively
One of the most significant benefits of digital account opening is providing individuals the fundamental right to conduct banking. Unfortunately, in some rural areas, options are often limited.
With digital account opening, businesses’ official micro merchant partners can start offering essential banking functions and varying payment methods to citizens in unbanked areas to begin their financial journey and secure the necessary loans.
Effective digital account opening implementation requires constant iteration, maintenance, and testing to determine what’s most effective for your business. The best practices when designing and maintaining a digital account opening system are as follows:
Set up analytics from day 1
Data is crucial and should be ready whenever you need it, especially when implementing a digital account opening process. Thus, it is vital to set up analytics from the beginning, so you can have a baseline to monitor performance.
Keep in mind the principles of “Privacy by Design”
You cannot undermine the value of security as the financial and business world transitions to digitalization. To ensure the safety of your digital accounting opening process, you must abide by the core principles of the privacy-by-design approach.
The principles of privacy by design emphasize “data protection through technology,” meaning that privacy measures are in place throughout the designing, implementation, and deployment stages to protect sensitive customer data at every step.
Solve a customer’s need
The primary purpose of adopting a digital account opening process is to make it easier for your customers. So, if your digital bank account opening involves more steps than necessary, it ultimately defeats the purpose of having one.
It’s best to assess why and how customers enter your funnel, understand their needs, and adjust to the circumstances accordingly. Moreover, you can gain new insights on how to solve potential issues customers may encounter later.
Iterate, iterate, iterate
Digital account opening solves many problems upon initial implementation. However, as time goes on, new problems will inevitably arise. It’s best to constantly iterate upon your existing systems and adopt new tactics and tools to provide the best experience to your customers.
Regularly conduct testing
If your platform doesn’t work, no one can use it. While you can rely on customer feedback, that’s not always the case. Some customers may choose to look elsewhere instead of waiting for a fix.
It will help to prioritize the testing of your platform. Conduct regular tests when updates roll out and constantly look for ways to improve your system. It’s best to get ahead of the problem than to look for a solution later.
In today’s ever-evolving business landscape, accessibility, efficiency, and speed are essential. Fortunately, integrating a digital account opening process help in those areas to help you stand out from the competition.
If you’re looking for the best financial services provider available, consider Brankas. With our Account Opening API, you can empower users to create new bank accounts on your platform and gain access to regular payments, customer loans, and more.
If you’re interested in what we offer and want to learn more, contact us today!
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