Financial institutions are mistaking multichannel account opening for omnichannel account opening, according to The Omnichannel Account Origination Report released by MANTL, a provider of account origination solutions.
More than one-third of banks and credit unions (35 per cent) that claim to offer omnichannel account opening do not have the ability to start an application in one channel and resume it in another channel, revealing they have multichannel account opening instead.
“This data is alarming because multichannel technology differs greatly from omnichannel technology. A multichannel account origination strategy has severe limitations, as it creates siloed customer journeys and will not grow customer satisfaction or lifetime value,” said Nathaniel Harley, co-founder and CEO of MANTL.
“Commercial and retail customers expect seamless experiences across all banking channels and only omnichannel technology will meet that demand while improving an institution’s bottom line,” continued Harley.
“The adoption of true omnichannel account origination technology is still early at regional and community banks and credit unions. However, the data makes one thing abundantly clear: omnichannel account origination is the future of the banking industry and banks and credit unions are prioritising adoption.”
The Omnichannel Account Origination Report, commissioned by MANTL in partnership with The Financial Brand, surveyed US banks and credit unions to identify omnichannel banking priorities and explore existing consumer and commercial account opening capabilities by channel.
The report findings underscore the important role omnichannel account origination technology will play in financial institutions’ ability to remain resilient and competitive. The report also revealed significant opportunities to leverage the technology to improve operational efficiency and better service commercial customers.
The urgency for omnichannel
Currently, only 12 per cent of banks and credit unions offer omnichannel account opening for both businesses and consumers. The report revealed that relationship managers are still the primary driver of new account openings and financial institutions only open a small volume of deposit accounts via digital channels. Nearly half (48 per cent) of financial institutions open less than 20 per cent of their consumer deposit accounts online.
However, there is a growing sense of urgency to implement omnichannel account origination technology in the immediate future. In the next 12 months, half of institutions (50 per cent) plan to implement consumer omnichannel account opening and a fourth of institutions (27 per cent) plan to implement commercial omnichannel account opening.
Businesses are underserved from a digital banking perspective
The majority of banks and credit unions (61 per cent) are opening almost all of their new commercial accounts (80-100 per cent) via a relationship manager. Two-thirds of institutions do not offer the ability to open a commercial account online (68 per cent) or in a call centre (67 per cent). That number is even higher for a mobile app (78 per cent) or an in-branch kiosk (90 per cent).
“Many financial institutions self-identify as commercially focused, yet they are not investing in commercial banking experiences,” said Harley. “This is especially problematic when you consider that business owners are also consumers and expect the same digital convenience across banking channels.”
Branch sentiment toward digital channels
Shockingly, one-fourth of banks and credit unions (25 per cent) claim branch staff who are responsible for onboarding new customers feel threatened by online account opening channels. Currently, one in four financial institutions (22 per cent) have no way to attribute new accounts opened digitally to a specific branch or relationship manager and 37 per cent of banks and credit unions believe that account attribution would change how their branch staff feels about online account opening.
“This disconnect signals to larger issues we are seeing industry-wide in regard to banking technology adoption and change management,” said Harley. “The benefits of modernising must be communicated across all levels of a financial institution and bank leadership should invigorate adoption. Investing in technology that elevates the employee experience, empowering branch staff to become more data-driven and better serve their customers, will help fuel adoption.”
