Alex Carriles, chief digital officer at Simmons First National in Pine Bluff, Arkansas, tallied up the frustrations of young, underbanked customers when his team started devising a new checking account for this audience last year.
For one, Generation Z and young millennials prefer banking on their mobile devices — but the small screen isn’t so friendly to the multistep account-opening process. They get puzzled when identity verification questions refer to mortgage payments they don’t have or loans for cars they have never owned. They may hit a wall when it comes time to fund the account if they have no existing bank account from which to transfer money.
Enter Coin Checking, an account that the $23 billion-asset parent of Simmons Bank launched in its home state in the first quarter and then the other five states it serves on July 1. The account was designed from the get-go to solve many of the snags Carriles had documented and, in the process, hook prospective Gen Z and young millennial customers.
“We tend to skew to an older demographic,” said Carriles. “We wanted to bring younger customers to make this their first bank and stay with us for the rest of their lives.”
Traditional banks often find it a challenge to create banking products that compete with dedicated apps developed by
“If you want to grow and have a good funding base long-term, this is a great niche to try to target,” said Stephen Scouten, managing director in equity research at Piper Sandler. “Banks are facing a path where fintech companies or startups that are targeted toward the underbanked could theoretically cannibalize their business over a longer period of time.”
Certain features of the account-opening product that the bank developed, including its design and the method with which it validates customer identities, stand out for a bank of Simmons's size, said Scouten.
The initial step taken to appeal to young demographics was the mobile-first layout of the website. Simmons built Coin Checking to be navigated on a smartphone first and foremost.
“We didn’t design a website and then make it little,” said Carriles. “It was designed to look great on this screen and looks the same way but larger on the desktop.”
That means users can scroll vertically through bite-size pieces of information about the account, rather than swiping left and right or zooming in and out.
The account application is broken into a few digestible steps per screen. For example, after clicking Open Now, users get a list of three things they need to open Coin Checking: a driver’s license or state ID, their Social Security number and five minutes of their time.
“When you are talking about opening a checking account on your phone, the degree to which you can make it more seamless for the consumer, the better hit rate you will get of someone clicking, opening an account and moving money,” said Scouten. “That is the right way to think about it instead of retrofitting your existing setups.”
Simmons also did away with the typical questions used to verify a customer’s identity, which can confuse customers with thin credit histories who find themselves repeatedly clicking “none of the above” to multiple choice questions.
The application asks for a few pieces of information: email, employment status, employer and Social Security number. Customers scan their driver's licenses or state identification cards. A third-party solution called IDscan, which is integrated with Jack Henry’s OpenAnywhere digital account-opening process via application programming interfaces, scans the card, takes a picture of the user and analyzes and validates the data. Then it transmits the data to the American Association of Motor Vehicle Administrators to validate the authenticity of the driver’s license or state ID.
Scouten says he has not heard of other banks deploying this method, especially banks of Simmons’s size. But he expects others will be fast followers when their core providers allow it.
The bank also inserted some humor into the process. When it comes time to read the terms and conditions, the bar at the top reads “Let’s shake hands.” Underneath, the application elaborates, “help keep our lawyers happy and agree to these terms.”
“That’s something you would expect to see in other apps for this age group,” said Carriles.
When it is time to fund the account, customers can transfer money from an existing bank account. But if Coin Checking is their first account, they can also wait up to 45 days to fund the account, with as little as 1 cent, by mobile deposit or by direct deposit from their employer. The bank sends new Coin Checking customers a welcome kit that includes a direct deposit form, a debit card, a wireless power bank, a charger cord and tips for using the Simmons Bank app.
Coin Checking is Simmons’ first fully digital account, meaning no human intervention is required from the bank's side from beginning to end. Carriles hopes to digitize other aspects of account opening in the near future, expanding the possibilities for Simmons to open customer accounts at their workplaces or on college campuses. He also wants it to be as seamless at a branch as it is with Coin Checking.
Right now, “you spend 20 minutes looking at the back of the head of the banker typing away as you wait for him to finish entering all of the information,” said Carriles.
“They are thinking about everything the right way and trying to be more proactive about implementing mobile and digital into their customer acquisition strategy,” said Scouten.
