Why mobile onboarding is such a turnoff

The rate at which consumers abandon mobile banking applications is quite disappointing.

One industry study showed that 40% of consumers abandon onboarding applications after initiating a process, citing length of time taken and needing too much personal information as main reasons for not completing a process.

With so much investment in the customer experience, why is it still taking so long for consumers to use a bank’s mobile app? More important, why are banks holding back on taking their mobile capabilities to the next level?

Fear of failure

It costs six times more to acquire a new customer than it does to retain an existing one, and a great customer experience has the potential to double revenue in 36 months, according to one survey.

While it may be intuitive to offer more capabilities to this preferred channel of choice, there are many reasons for the lack of advanced mobile capture capabilities adoption. For starters, the technology was considered more cumbersome to develop and deploy in its early days. But fear of failure has stalled financial institutions the most from providing more than remote deposit capture (RDC) and mobile bill pay.

Understandably, financial institutions are notorious for being weary of change. Just a minuscule failure rate of its mobile app could create a huge and devastating impact. Take a bank with say, 10 million customers. A failure rate as low as 1% would result in 100,000 unhappy and frustrated users.

When RDC first entered the scene in 2004, it quickly stormed into banks’ product portfolio and took only three years for it to be offered by 88% of the top U.S. banks to commercial customers. Fast forward to 2019, and apart from RDC, banks have not fully leveraged mobile capture technology to its full extent.

Banks can’t afford to limit advanced mobile capabilities

Despite slow adoption by banks, there are more reasons than not to offer advanced mobile capture capabilities. PwC’s Digital Banking Consumer Survey revealed that 82% of millennials, ages 18 to 24, use mobile only banking.

Millennials are also on target to represent 75% of the workforce by 2025, greatly increasing their spending power. Businesses can’t ignore their desire for a tech-driven approach and the instant gratification that mobile services provide. Before long, Generation Z, who “learned how to swipe a screen before they learned how to speak,” will be influencing and dictating the mobile service offerings of banks.

Customer loyalty and onboarding are natural hot spots for leveraging advanced mobile capture capabilities. Complexity of digital forms and heavy requirements for manual typing are the biggest barriers when it comes to onboarding customer information.

Additionally, the requirement for people to download an app in order to complete these processes often presents another barrier.

Some of the most common reasons that banks see a dropout during new customer onboarding are: Complex registration forms that require too much manual typing; an inconsistent digital experience on mobile devices compared with the website; and a requirement to download a native app to complete the process.

While native apps are meant to provide convenience and ease, the timing of when a consumer must download it can be problematic. When consumers are required to download the app in order to complete the sign up process — before they have fully committed to being the bank’s customer — this can create an unnecessary hurdle or barrier to entry. Often at this point, there are extra steps in the process and the would-be customer is then lost.

Taking mobile capabilities to the next level

The goal should be to increase the ease of use for any mobile-based customer touchpoint by reducing the number of manual interactions, and the frustration, that a customer experiences.

For example, during a customer’s sign-up process, loyalty can be gained in the first stages of onboarding by meeting the customer in their preferred channel; and offering them a simple and easy solution that they prefer when opening an account. Next, provide the customer with a seamless experience to complete the onboarding process with the self-service ability to capture and deliver trailing documents using their mobile device.

Once customers are engaged in the sign-up process, they are still often lost at critical touchpoints when required to provide trailing documents, such as proof of income or residence, as there is often no convenient way to complete the task by submitting the documents via mobile device.

Banks can remove this friction by enabling customers to use their smartphone’s camera to capture payment slips, invoices, ID cards, passports or other documents they are required to submit, with no extra steps required to download an app.

Better yet, banks can allow customers to use a web browser on their mobile device to automatically capture images of documents in real time in order to quickly complete the sign-up and account opening processes. This can help a bank to provide a smooth customer onboarding experience with higher completion rates.

Also, know-your-customer compliance is another area where mobile banking can enhance the customer experience. Instead of going to a branch office, allow potential customers to open a new bank account by hovering their phone over their ID, then snapping a selfie. Comparing the two photos can be used for identity fraud detection.

The opportunities to expand mobile capabilities needs to continue evolving to keep pace with customers’ growing needs and preference for more online banking. In Bank of America’s first quarter earnings alone, more than 27 million customers were active mobile banking users, up 9% year over year. And 77% of its deposit transactions were completed through digital methods.

Imagine the new customers and revenue opportunities missed industrywide by not offering more advanced, yet easier to use mobile onboarding and self-service capabilities. It’s time for the financial services industry to re-evaluate how it can better utilize mobile capture technology.