SAN FRANCISCO—FIs intent on preparing for the day when digital channels will dominate account opening should rethink their timing. That day might already have arrived, a new report indicates.
A Javelin Strategy & Research report shows the checking account is at a tipping point, with 70% of likely applicants saying they would prefer to submit a digital application in 2015.
The “far-reaching implications” apply not only to the “branch of the future” but also to the branch-centric culture of banking itself, the company stated.
Javelin’s report, titled Digital Account Opening Reaches the Tipping Point, finds Americans are increasingly comfortable with digital channels to open various financial accounts.
In 2014, more Americans applied for credit cards and a variety of loan and investment accounts through online and mobile channels – with the volume of applications on smartphones and tablets jumping more than 60% for auto loans, mortgages, and credit cards, the study shows.
“The upshot is that retail banking is facing a fundamental and irreversible shift. The branch-centric culture of banking will need to comingle with digital channels to deliver a consistent consumer omnichannel experience,” Javelin stated.
While digital account opening is winning for many, there are still several perceived weaknesses that financial institutions must address, according to the study. Notably, for digital channels to gain usage, FIs must counter the perception that branches have the edge when it comes to protecting personal data and for obtaining answers to questions.
“Financial institutions will win by ensuring that applicants feel the outcome was smooth and seamless even if even if they start the process in one channel and finish in another. Applicants should never have to start over from scratch,” said Mark Schwanhausser, director of omnichannel Financial Services at Javelin.
Javelin’s report, based on a survey of 3,100 American adults, assessed account opening channel preferences for various types of accounts including auto, credit card, loans and investment accounts.