At a time where conducting business from a couch or a home office has become the norm, banks have a unique opportunity to find ways to expand their digital presence. The struggle many face is not knowing where to begin.
The most successful banks are attracting new and retaining their current small business customers. So, what is the key to success with winning small business customers?
Making digital account opening a top priority.
By streamlining their online processes and making them more user friendly, especially in the area of digital account opening, financial institutions have been able to make their small business customers happy and attract new ones.
For small businesses, digital banking capabilities are particularly important right now, as they are in immediate need of relief that banks offer with the insurance of a government guarantee. These prospective bank customers are looking for convenience.
Unfortunately, many banks and credit unions have struggled in this area. According to Jim Marous, publisher of the Digital Banking Report: “The abandonment rate for online account opening is 19%. Abandonment rates increase significantly as the time required to complete an application increases.” Additionally, research from Javelin Research shows that only 8% of successful account applications were completed start to finish on a mobile device.
As so many small businesses across the country have been impacted by the COVID-19 pandemic, the Paycheck Protection Plan (PPP) loan has provided forgivable loans to small businesses and allowed employees to keep working.
This is an incredible opportunity.
By making it easy for new business customers to set up a digital account, these institutions are capturing new long-term customers when they approach the bank for assistance such as a short-term PPP loan.
The U.S. Bureau of Labor Statistics reported that there were 5.9 million unemployed people in May of 2019. Today we have far surpassed this, with an estimated 51.3 million people filing for unemployment.
Businesses taxed with trying to maintain hired workers found immediate relief in PPP programs. Furthermore, they avoided the obstacles that come along with layoffs, unemployment and rehiring.
The key to success for banks is to make the new account opening procedure as painless as possible by requiring only the information necessary to set up the account: verification or authentication of customer’s identity, electronic deposit acceptance for immediate account funding and provision of requisite disclosures.
When financial institutions set up digital portals for these activities, account opening becomes much more painless. Even for account types that require multiple steps by nature, an account opening solution can simplify things by regularly letting customers know where their applications are in the process and what information is still needed from them.
The right digital banking solution is a win-win for both the financial institution and the small business customer. It allows the bank or credit union to get all of the information it needs, while still making the process easy for their new customer.