Financial institutions in the United States have lost at least $873 million in potential revenue, due to the fact that 5.8 million customers attempted – and failed – to open accounts online. According to the research “2011 Online Account Opening: Faulty Process Hobbles FIs in the Battle for Customer Acquisition, Profitability and Retention” conducted by Javelin Strategy & Research, 53 percent of the applicants involved in the study have been able to successfully open and fund their account. The other half has abandoned the process and had to go to the branch to complete the rest of the application process.
As more customers decide to embrace online (and mobile) banking, the ability to successfully open an account, while seemingly simple, can be a critical event. Research has shown that once customers open online accounts, they tend to stay with these accounts. The reasons vary, but one reason frequently cited is the tendency to use online bill pay capabilities as part of the overall online banking experience. This bundling of capabilities provides a strong incentive to remain with that financial institution, unless there is a compelling reason to leave. Consequently, if a potential customer cannot successfully open an online account, there is a risk that a competing institution may gain the business, as well as a long-term customer relationship.
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