While community banks and credit unions consistently offer a high level of customer service and person-to-person connection, operational efficiency poses a different kind of challenge. This is in part because legacy technology—which until recently was the only option available to community institutions—has hindered efforts to find efficiency gains.
Today, third-party online account opening offers a solution. OAO allows customers to open new accounts digitally, and it offers high-performing solutions including easy-to-use tools for decisioning, fraud prevention and core booking.
To improve your financial institution’s efficiency on digital channels, here’s what to look for in an OAO platform:
Real-time core integration
Many legacy solutions still book new accounts in batches. Batching can result in lengthy waits before a customer can access funds or even log in to online and mobile banking. This approach is slow and can cause bottlenecks and breakdowns in your FI’s core, especially during peak hours.
Effective OAO solutions should book applications to your core automatically via a real-time read-and-write integration. This has several benefits, including the ability to underwrite new and existing customers differently. This creates a more efficient onboarding experience, especially for existing customers or members, who can speed through account opening in 40 seconds or less.
Relying on manual processes for fraud reduction, know-your-customer decisioning and risk checks can slow down approvals and weaken your competitive position. Faced with lengthy wait times in the account opening process, people may get frustrated and abandon their applications. An optimal application process should take less than five minutes, with best-in-class experiences averaging below three minutes.
To make a three-minute account opening experience possible, information must be verified in real time. With today’s technology, over 90% of application decisions can be made without manual intervention. Using numerous digital data sources, high-performing OAO solutions can validate applicants’ identities with greater accuracy while giving institutions the flexibility to customize decisioning rules and risk thresholds according to their compliance programs.
A critical benefit of digital data sources is enhanced fraud prevention. With a more thorough view of an applicant’s financial history, banks and credit unions can more readily detect the use of stolen or synthetic IDs and prevent fraud.
Research indicates that if new account openers don’t engage with your FI’s communications in the first 90 days, they probably never will. This means that the first three months are key to capturing customers’ or members’ interest and building a relationship with them.
Automating key onboarding steps—such as the delivery of checks and debit cards—and streamlining communications can help you increase account engagement and obtain more share of wallet.
Some community institutions may view automation as counter to their high-touch model, but automation doesn’t have to mean impersonal or inflexible service. In fact, automated processes can be tailored to an individual’s interests or life stages and designed to deliver the experience your FI wants to provide. Further, automation makes it easy to test and measure initiatives and make changes accordingly.
For the best results, your FI should make use of the channels most likely to resonate with customers or members, such as email, SMS, social media and microsites. Regular communication through these channels boosts retention and keeps customers or members informed about your FI’s other products and services. Once the relationship has been firmly established, your FI can use automated communications to cross-sell relevant products at the most opportune times.
In addition to expanding your reach and growing new accounts, OAO solutions offer many benefits to your FI. A high-performing solution can help you reimagine key processes to optimize operations, lower costs and make the onboarding process more enjoyable for customers and staff alike.
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