STATE OF DIGITAL SALES

Transcription

1 PAGE STATE OF DIGITAL SALES IN BANKING

2 Are banks ready to capitalize on the opportunity of acquiring customers over digital and mobile channels? This study measured the digital sales capabilities of the 10 largest banks in three regions: the United States, the United Kingdom, and Australia. To collect the data, an independent researcher examined the digital mobile application experience at each of these banks when applying for Personal Banking, Business Banking, and Wealth Management products. The results were measured and compared across the top banks on an overall, per country, and per product basis. This report summarizes those results and offers some key takeaways for banks.

3 TABLE OF CONTENTS EXECUTIVE SUMMARY SURVEY HIGHLIGHTS 3 CONSUMERS HAVE EMBRACED MOBILE, BUT TOP FINANCIAL INSTITUTIONS AREN T KEEPING UP 4 PERSONAL BANKING PRODUCTS ARE THE MOST LIKELY TO SUPPORT MOBILE ONBOARDING 5 THE UK AND AUSTRALIA LEAD THE US IN OFFERING MOBILE ONBOARDING FOR WEALTH MANAGEMENT 6 BANKS ARE MISSING A HUGE OPPORTUNITY WITH SMALL BUSINESS BANKING PRODUCTS 7 MISSING THE OMNI-CHANNEL OPPORTUNITY 8 BENCHMARK YOUR BANK S DIGITAL SALES READINESS 9 RESEARCH APPROACH 10 ABOUT AVOKA 11

4 PAGE 1 EXECUTIVE SUMMARY Customers have embraced mobile devices, but are banks keeping pace? In particular, are they making it easy for their customers to acquire new products through the mobile channel? After assessing the top 10 US, UK, and Australia banks digital sales capabilities, the answer is a solid NO with the exception of a few bright spots. Digital Sales serves a critical purpose its function is to acquire customers through account openings, loans, credit cards, and other products. Digital marketing is sophisticated and well established. It focuses on finding a prospective customer and having them find you. Digital service, such as online account management for established customers is widely accepted. Digital sales is the critical link between the two, the portion of the process where a prospect applies for a banking product and becomes a customer. This report documents the strong and weak (mostly weak) segments of the industry in making the critical conversion from prospect to customer. FINISH DIGITAL SERVICE DIGITAL SALES Provide digital capabilities to manage & access money via internet and mobile banking. Capitalize on the individuals' "interests" by making them a new customer. DIGITAL MARKETING Ensure the bank gets "found" if a customer is in the market for a new product.

5 PAGE 2 As the research in this report shows, banks often don t understand how to harness digital sales, especially when it comes to supporting mobile devices. With low interest rates and pressure on revenue, improving digital sales is one of the quickest and easiest ways to boost acquisition rates and increase revenues. Certainly there s an eager market for smartphone transactions: 64% of US adults 1, 66% of UK adults 2, and 81% of Australians 3 own a smartphone. Smartphone ownership is especially high among young adults as well as those with relatively high income and education levels. The demand is there, but as the research shows, banks haven t yet embraced it. Banks are doing well with digital marketing such as promoting their products via social media, internet search, online ads, their websites, and more. However, there s often a disconnect between digital marketing and digital sales. For instance, consider the example of a consumer viewing a TV ad for a new credit card. They use their smartphone to visit the bank s website to learn more; perhaps they re even ready to apply. But if the mobile application experience is poor, for example, perhaps the onboarding process was designed for a PC rather than mobile device, too much typing is required, or the application isn t touch-friendly, the customer is likely to abandon. Abandonment rates of 90% for new product applications are not unusual. That s a shame the marketing worked, but the digital sales experience fell flat, and a potential new customer was lost. Most banks tend to have a reactive response to this challenge. Their customer base has already embraced smartphones and digital disruptors, such as PayPal, SoFi, and Betterment, are eating away at their traditional businesses. These market forces often cause financial services organizations to be reactive rather than proactive a sure proposition for losing this battle. The good news is there are plenty of opportunities for improvement as you ll see in the study s results. 1 U.S. Smartphone Use in 2015, Pew Research Center, April 1, The UK is now a smartphone society, Ofcom, August Digital Australia: State of the Nation

6 PAGE SURVEY HIGHLIGHTS CONSUMERS HAVE EMBRACED MOBILE BUT BANKS AREN T KEEPING UP Among the top banks in this study, only 17% of products are mobile responsive. Clearly, there s much room for improvement in this area. Personal Banking and Wealth Management account openings are most likely to be supported via mobile devices (21%), but Business Banking customers globally are not being offered the convenience of the digital channel (4% mobile friendly). THE UK AND AUSTRALIA LEAD THE US IN OFFERING MOBILE SUPPORT FOR WEALTH MANAGEMENT ACCOUNT OPENING 34% of UK bank products offer a mobile responsive experience for Wealth Management account opening while 27% of Australian banks and only 4% of US bank products do. Similar to Business Banking products, there s a huge opportunity here for banks to offer Apply Now experiences for Wealth Management via mobile devices. BANKS ARE MISSING A HUGE OPPORTUNITY WITH SMALL BUSINESSES BANKING Only 4% of Business Banking account openings across the US, UK and Australia are mobile responsive. Considering that small business owners rarely have time to visit a branch in person, banks are missing a huge revenue opportunity by not offering them the convenience of applying for new products via the digital channel. BANKS WORLDWIDE ARE MISSING THE OMNI-CHANNEL OPPORTUNITY TO LINK DIGITAL AND TRADITIONAL CHANNELS Key features that complete the digital sales proposition are missing from most bank offerings. Best example is Save-and-Resume, the capability to begin an application on a phone, then complete it later in the branch with help from the call center. Only 20% of products overall include a Save-and-Resume feature.

7 PAGE 4 CONSUMERS HAVE EMBRACED MOBILE, BUT TOP FINANCIAL INSTITUTIONS AREN T KEEPING UP Nearly half (44%) of banking products evaluated could be applied for online. This may appear as great progress, but it ignores the fastest growing trend. Consumers have embraced mobile, and the vast majority of banks still aren t allowing customers to apply online for new products using mobile devices. In fact, among the top banks in this research study, only 17% of product applications are mobile responsive. Clearly, there s room for growth in this area. The Personal Banking and Wealth Management categories lead the way with more products (21%) offered via smartphone than Business Banking (4%). However, there s still plenty of room for growth in all categories especially as younger consumers, who expect to use their mobile devices for transactions, start purchasing these products. This is a business opportunity for the taking: banks that are supporting mobile Apply Now experiences often see greater than 40% of all applications for new consumer banking products coming from mobile. DIGITAL READINESS FOR BANKING PRODUCTS/SALES OVERALL 44% 17% PERSONAL BANKING 59% 21% WEALTH MANAGEMENT 35% BUSINESS BANKING 25% 21% 4% Apply on Mobile Apply Digitally

8 PAGE 5 PERSONAL BANKING PRODUCTS ARE THE MOST LIKELY TO SUPPORT MOBILE DEVICES Of all banking categories, Personal Banking products, such as consumer loan or credit card applications, are most likely to support mobile devices. Perhaps the reason is that a high percentage of consumers already use their smartphones to perform transactions so banks have invested in supporting mobile onboarding for these types of products. This is also the one area where US banks aren t as far behind Australia and the UK in fact, 37% of Australian bank products offer mobile support for Personal Banking products while 9% of products at UK banks and 18% in the US do. PERSONAL BANKING: ACCOUNT OPENING ON MOBILE DEVICES 37% 21% 18% 9% OVERALL AUSTRALIA UK US

9 PAGE 6 THE UK AND AUSTRALIA LEAD THE US IN OFFERING MOBILE SUPPORT FOR WEALTH MANAGEMENT ACCOUNT OPENING Both the UK and Australia far outpace the US in offering mobile support for Wealth Management account openings. Much of the growth in mobile onboarding in these countries was driven by their governments or new financial offerings. The UK s growth is primarily due to ISA s (Individual Savings Accounts) which is a new product offering and classified as an investment/wealth product. Government led initiatives such as Superannuation in Australia and ISAs in the UK have driven a significant uplift in the ability for consumers to access Wealth Management products through the digital channel. Part of this is the relative newness of these products, and part of it has been a focus on keeping administration costs for these products down (digital is cheaper than paper or branch). As a result, 27% of Australian Wealth Management account opening can be applied for through the digital channel and 34% of UK products, but only 4% of US offer the same convenience. WEALTH MANAGEMENT: ACCOUNT OPENING ON MOBILE DEVICES 21% 27% 34% 4% OVERALL AUSTRALIA UK US

10 PAGE 7 BANKS ARE MISSING A HUGE OPPORTUNITY WITH SMALL BUSINESS BANKING PRODUCTS Banks are missing a huge opportunity for new customer acquisition and revenue growth by not offering the ability to apply for Small Business Banking products, such as account openings or loans, via mobile devices. Australian businesses can apply for 9% of Small Business Banking products using their smartphone while the US has 1% and the UK has only 2% of Small Business Banking products via mobile. Consider that US small business owners work 52 hours per week and the best retail bank branches are open 51 hours per week typically the same hours as the small business owner is working. Since the majority of Small Business Banking products can t be applied for via the digital channel (PC or Mobile), business owners must visit a branch during office hours when they should be running their business. Banks should seize this significant opportunity to grow their small business customer base. SMALL BUSINESS BANKING: ACCOUNT OPENING ON MOBILE DEVICES 9% 4% 2% 1% OVERALL AUSTRALIA UK US

11 PAGE 8 MISSING THE OMNI-CHANNEL OPPORTUNITY Across all three regions, the advanced features that indicate a commitment to digital success are missing from most banks offerings. Most important is Save-and-Resume, the ability to begin an application and complete it later. This is especially important for omni-channel operation, where an application can be started by a prospect on a phone, then completed with a branch visit with help from a banker. Because most initiated applications are not completed in one session, Save-and-Resume is a key driver in digital success. In the effort to unify the branch, call center, and digital experience, it is an absolute necessity. The data shows that 20% of all banking product applications feature Save-and-Resume, led by 30% in Australia, 16% in the US and 15% in the UK. This is consistent with the overall results and the faster adoption exhibited in the Australian market. ACCOUNT OPENINGS THAT INCLUDE SAVE-AND-RESUME 30% 20% 15% 16% Overall Australia UK US

12 PAGE 9 BENCHMARK YOUR BANK S DIGITAL SALES READINESS As the data shows, there s plenty of room for improvement in digital sales among banks. Giving your customers the option to use a mobile device for onboarding must be done in order to satisfy their increasing expectations for simplified, frictionless transactions. The good news is that improving your digital sales will help you acquire more customers and increase revenues. And the time to do it is now. To improve your digital sales, contact Avoka for an assessment of how your bank compares to the top worldwide banks in this study. We ll benchmark your current digital sales process on a number of factors to help you understand exactly what improvements to make and how they ll affect revenue and customer acquisition. Our experience shows that banks with a strong focus on digital sales can increase their application completion rates by more than 60%. Contact us to learn how you can get those results, too. Get a Benchmark Assessment of Your Bank s Digital Readiness

13 PAGE 10 RESEARCH APPROACH The process for gathering data on each of the top 10 banks in the US, UK, and Australia included: Examining the products listed on the bank s website under Personal Banking, Business Banking and Wealth Management (accounts, cards, loans, etc.). For each product in these categories, we looked for the ability to Apply Online on the desktop website Where the button existed, we clicked and looked at the first couple of pages of the Apply Online application to assess functionality Applications were not completed or submitted We treated variations on Checking and Deposit accounts as separate products, even if they appeared to have the same application experience The same process was repeated on a smartphone Five major capabilities were examined for each banking product: 1. Apply Online: Is there an option (desktop or mobile) to apply online for the product? (Inquiry- type forms were excluded.) 2. Apply Mobile Responsive: Was the application experience mobile responsive for smartphones? 3. Apply From Mobile: Could the link to Apply be accessed from the bank s mobile website? 4. Save-and-Resume: Did the application experience offer the consumer the ability to save a partially completed application and resume later? 5. Website Consistent: Was the application experience consistent with the look and feel of the website?

14 PAGE 11 ABOUT AVOKA By focusing on the customer-centric portion of digital transformation, Avoka achieves speed-to-market for digital and mobile customer acquisition. Using our design once, deploy anywhere platform, business units create their omni-channel initiatives and control outcomes without long development cycles. Founded in 2002 in Sydney, Australia, Avoka has won numerous industry awards for its innovative customer experience solutions and digitized over 100 million transactions spanning more than 16,000 sales and service projects.