Commercial banks are still playing catch-up when it comes to digital account opening, even as more business banking customers move online.

Commercial customers are moving their businesses online, with 32% of 127 banking executives surveyed saying their clients now primarily interact via mobile and 29% interact by desktop, according to a recent report by Phoenix-based Catalyst Consulting Group.

Those may seem like small percentages, but the numbers are significantly higher than 2021, when 26% of interactions were from mobile and only 6% from desktop.

Digital account opening is key

Meanwhile, commercial banks are focusing on digital account opening, with 56% of the banking executives saying this is the most important technology issue for business customers in the next five years.

“This is a very hard arena that respondents agree is important and needs to be solved for,” the report noted, and that “… the difficulty is largely down to the more complex relationships and workflows involved, which make it challenging to automate key functions like verifying business entities.”

The result: Commercial banks are focused on solving the technology problem of opening business accounts digitally rather than automating workflows, the report concludes.

“We can expect the process to evolve to pull in greater automation as institutions get more comfortable using technology to onboard, especially in certain critical areas like verifying business documents,” the report stated.

Data visualization and loan origination

The second leading area of importance based on the customer survey was offering interactive data visualization or dashboards at 36%, followed by digital loan origination at 32%, although the significance of digital loan origination varied by whether a bank took a traditional or progressive approach. A progressive approach was defined as meeting three criteria:

1. Less than 50% of bank technology acquired from a single vendor;
2. Fintech companies utilized as an integral part of bank strategy; and
3. At least one fintech investment made by the bank.

Thirty-eight percent of traditional commercial banks saw digital loan origination as of key importance, versus only 14% of progressive commercial banks. Progressive banks instead put their priorities into more advanced tools, such as cash forecasting and integrated payables and receivables, the report noted.

“This suggests progressive institutions are thinking a bit more ambitiously about how far the industry will go in five years’ time and the capabilities that will be coming to the fore,” the report stated. “It’s an important indicator, and institutions broadly will need to consider what they need to support such a future, especially from a technology and infrastructure standpoint, as legacy systems can make it difficult to quickly deploy new features and offerings.”

The report also looked at trends for retail banks, where improving the customer journey ranked highest at 65%, followed by integrating with fintechs to provide new services at 42%.

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