Frictionless Sales in Banking
by: Derek Corcoran
Every industry suffers from “abandonment” issues — customers commence a purchase transaction by taking some action such as clicking a “Buy Now” or “Apply Now” button, but give-up/exit/cancel before completing.
However, financial services appears to be the only industry that has resigned itself to accept abandonment rates in the digital channel (online and mobile) of 70% to 90%. To be crystal clear, what I’m saying is that for every 100 people who click “Apply Now” after reviewing a Credit Card or a Loan or a Transaction Account or an Insurance Policy, between 70 and 90 abandon before completing the application.
Ask yourself — why would someone click the “Apply Now” button if they weren’t genuinely interested in applying?
The reality is, they’ve clicked because they are interested — but the process of applying is so laborious that they abandon as they don’t have the time, don’t have the information to hand or simply get frustrated with a poor customer experience.
Amazon addressed friction in the retail or eCommerce experience with Amazon OneClick — by pre-configuring payment and delivery details a customer can order, pay and ship a product to their door with literally “one-click”.
Regulators won’t allow banks to on-board a customer to a new product with ‘one click’ — things like KYC (Know Your Customer) and the Responsible Lending Act make that an impossibility. But Fintech has provided us with a range of services to remove the “friction” from the sales process. So whilst we cannot deliver a ‘one-click’ account opening experience in financial services, we can do a lot better than we’re doing right now.
This article will explore the technologies and the financial institutions applying them to remove friction form the banking experience.
Editors Notes: This entry has been submitted to the FINTECH Book, the world’s 1st globally crowd-sourced book on FINTECH. Readers that enjoyed this initial abstract are invited to share and like it so that it may be featured in a longer version.