Over the past 30 years, the new account opening process hasn’t changed very much. Sure, there is a far greater use of technology at the new account desk and there is the opportunity to open accounts online, but the overriding objective for most banks is still operational efficiency as opposed to building the foundation for a lasting relationship.

This is why new customer onboarding has become so important to the banking industry. Without a rapid deployment of communication around the best way to use the product(s) opened and encouragement to expand the functionality of the product by taking advantage of engagement services such as online banking, direct deposit, bill-pay, mobile banking, etc., the customer experience will be lessened and the potential for attrition increases.

In fact, first year attrition continues to be a strategic challenge at most banks, with defection rates of 20%, 30% or even 40% not being uncommon. For those organizations with a multi-touch, multichannel onboarding program, however, the rate of attrition drops significantly. Unfortunately, even for those banks that have an onboarding program in place, the program may not be optimized due to a reliance on transactional and demographic insights as opposed to psychographic and behavioral insights.

While demographic and early transactional data can provide directional guidance, a deeper knowledge of the customer’s financial goals, channel preferences, product usage, preferred channels and reason for coming to your institution is needed to personalize the onboarding communication and move the customer from product engagement to relationship entrenchment. The importance of gathering this additional insight was highlighted in the Javelin Strategy research entitled, ‘2010 New Account Onboarding: Using a Systematic, Tactical Approach to Deepen Financial Customer Relationships‘.

According to the research, communication channel preference, messaging, offer selection and even transaction channel choice can be impacted by behavioral characteristics such as why the consumer came to your bank in the first place, the lifestage of the customer and the financial services the customer has used in the past.Unfortunately, these types of questions are usually not pursued during the efficiency-driven new account opening process.

To fill in this knowledge gap, best-in-class financial organization supplement traditional new account opening with an onboarding process that includes a short survey of needs and behaviors of the new customer. While this survey can also measure customer satisfaction with the new account opening experience, most banks focus on gathering insights into the reason for opening the new account, communication channel preferred, the financial goals of the customer and what financial services the new  customer holds elsewhere. In addition, some banks ask questions to determine key life events that may be on the horizon and determine who in the household will be in charge of managing the new account.

According to Sherrie Riley, Vice President of Sales at Scantron, a leading provider of assessment and survey solutions, “New account surveying is another way that banks are reaching out to find out more about their customers. This first touch assessment fits within a series of strategic survey programs that help an organization measure, monitor and improve the customer experience”. The new AllianceLink™ Financial surveys include the a New Account, Closed Account Survey, Teller Transaction Survey, and Product Survey. 



Source: AllianceLink Financial

 Without new account surveying, banks are limited to just basic demographic and transactional data since the customer has no history with your bank. This limited insight relegates a bank to treating all new households the same or building segmentation on only limited information as to the household’s growth potential. With the application of additional insight, we have found banks improve the overall value of relationships by 50%, 100% and even more than 150%, while reducing attrition and increasing both engagement and share of wallet. In fact, the question around services held at other organizations has had the ability to impact relationship cross-sell rates by 1.5 to 2 services on average during the first year of the relationship.

In the same way that using the opening balance in the account is a poor proxy for determining future value of a relationship, an incomplete picture of the customer’s needs and behaviors can lead to sub-optimal communication treatments, offers and/or messaging. By using additional insights captured through new customer surveys, banks can improve their onboarding program by identifying those customers with the highest potential and can better serve customers with lower potential by providing services geared to their unique needs. This will reduce attrition and will increase the likelihood of share of wallet build.

Does your bank capture additional insights to enhance the new customer experience and increase the potential value of the relationship to your bank? I would love to know.