COLUMN: Banking is not immune to the mobile revolution, and changes will come fast

A common misconception in the retail banking world is that despite the majority of internet sessions being held on mobile devices, customers want to ‘browse’ but not ‘buy’ on mobile.

Despite nearly every other major consumer-facing industry — including transportation, entertainment and, of course, retail — moving dramatically to a mobile-first (or mobile-only in some instances) experience, the banking industry has been slow to implement mobile-friendly account opening and lending applications.

Many still hold on to the idea that desktop sessions offer the gravitas more appropriate for a product as serious as a bank account, believing that mobile is both too constrained and too spontaneous of a platform for consumers to action a new bank account or loan application. Most banks believe that mobile sales conversions are still a thing of the future.

New data, however, shows that the future may have already arrived – and smart banks must capitalize on mobile account openings to compete in the age of fin-tech.

As per proprietary data from our Avoka Transact onboarding platform, in mid-2017, mobile overtook desktop as the most popular channel for applying for new deposit accounts at a top-10 U.S. bank. The ratio tipped in April 2017, with mobile applications outnumbering desktop 50% to 45.5% over the course of a week. And mobile has retained its lead ever since.

When it comes to abandonment, whereby consumers begin an application but drop it before completing the transaction, this data has also upended a second common assumption.

Conventional wisdom has long held that mobile abandonment is higher than desktop, because of the spontaneity of the engagement and the small size of the screen and keyboard. But the latest advances in mobile account opening features, like pre-fill of identity information from a driver’s license photo or from the mobile provider, now in fact make mobile the easiest of all options for the on-the-go customer.

For the particular bank, these insights are taken from, continued analytics-driven tweaks to their mobile onboarding process drove their mobile completion rate to 62%, outstripping their overall completion rate of 56.6%. Both of these numbers blew away the sub-30% rates that are typical across the industry.

What can banks learn from these developments?

The most obvious lesson is that the mobile revolution is only picking up steam. As people spend more time on their mobile devices, they’re becoming more comfortable using them for increasingly complex tasks. Instead of migrating to their desktops to fill out complicated applications, users expect to be able to conduct their entire digital lives, from start to finish, from wherever they happen to be.

Mobile account openings are also much more sensitive than desktop to the design of the experience, and well-designed applications have a much higher completion rate.  When applicants are working using small touch screens, they expect smooth, efficient prompts. Factors such as large text blocks, complex text input, and horizontal and vertical scrolling will have a big impact in reducing the completion rate for mobile prospects.  Desktop users are much less sensitive to design, so many banks have been able to “just get by” without an optimized desktop experience.  However, when translating their offerings into mobile, banks can’t expect users to be as forgiving.

Data shows that most abandonment takes place during the early “About You” section of applications. Making it easy for users to input basic identification information with as few touches as possible through the use of features such as pre-fill and automated identity capture can be the key difference between winning the business of a potential customer and having them abandon their efforts in frustration.

These processes also tend to result in applications with fewer errors and more dependable information, yielding a higher final conversion rate. Fraud rejections appear to be lower on mobile as well, as more rigorous identity checks give banks a higher confidence in the validity of mobile-captured input.

The fintech world has always been awash with trends and prognostications, but new data on bank applications makes it clear that the shift to mobile is not only very real but presents a golden opportunity for banks to amp up their conversion rates.

This sea change marks an inflexion point for banks—meeting the moment with frictionless mobile onboarding technology will allow some to gain a leg up, while those that continue to depend on the same tired old desktop-centric applications will find themselves losing out. In order to make sure they don’t fall into the latter camp, tech teams will need to take a good, hard look at their onboarding technology and make sure they’re doing everything possible to seize the mobile sales opportunity.

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