In business as in life, you don’t get a second chance to make a good first impression. And that applies to digitally onboarding new accountholders and borrowers.
Lenders that don’t enable consumers to quickly and seamlessly open new accounts online risk losing them to application abandonment. Where will those consumers go? To competitors that do offer top-notch digital experiences.
Meeting Consumer Expectations
Consumers expect to open new accounts and complete loan applications online as effortlessly as signing up to use popular ecommerce sites and social media apps. If not, they may abandon their applications before they complete the onboarding process.
“Recent research indicates that unless a financial institution can open a new account or complete a new loan application in less than five minutes, the potential for the consumer to abandon the account opening increases to as much as 60% or more,” according to Jim Marous co-publisher of The Financial Brand.
The statistics tell the story:
- 48% of consumers encountered digital friction when they tried to open accounts online.
- 48% of consumers who experienced digital friction took their business to another bank.
- 68% of consumers abandoned their online applications for financial services.
- 75% of consumers who abandoned their online applications were ages 25–34.
Lenders know that high application abandonment rates cost them new business and revenue. Despite this, most still struggle to reduce those rates or even avoid application abandonment altogether.
Here are three ways to create less friction for consumers, which can lower your application abandonment rates.
1. Keep the Application Short
Consumers who encounter lengthy and complicated online application forms will likely abandon their applications and seek out lenders that offer a well-designed, intuitive, and smooth application process.
Keeping potential consumers engaged requires limiting the number of pages to no more than four or five. The more time it takes people to open accounts online, the greater the chances they’ll give up. It’s crucial to ensure consumers can fill out their applications on the first try because if they abandon the process, they’re unlikely to return. To help you do that, MeridianLink offers MeridianLink® Opening, an online account opening system that unifies deposit account opening and funding for all channels and product types, which empowers applicants to apply, e-sign documents, and automatically create core system account records within minutes.
2. Ensure the Site Is Quick, Responsive, & Flexible
Enabling consumers to open accounts, apply for loans, pay bills, or transfer funds online is table stakes in today’s market. To stand out from the crowd, you need to create an Amazon-like experience.
That means making the process as simple and quick as possible. Avoid unnecessary questions and ensure your application is user-friendly on various devices, especially mobile phones. Prefill onboarding forms with borrowers’ identity information from a trusted source such as a credit bureau. Doing this will cut down on manual errors and speed up the onboarding process.
Using MeridianLink® Consumer as your loan origination system (LOS) will allow you to consolidate and streamline applications from all channels, applying the same rules and processes to ensure a streamlined process for employees and a superior experience for consumers.
“With our previous LOS, we experienced a high volume of abandoned or incomplete loan applications. Integrating MeridianLink Consumer has been a lifesaver and resulted more completed loan applications.” —Rogue Credit Union
3. Leverage New Technology for Ease of Use
Helping borrowers complete their online applications faster requires technology designed for ease of use. Your online application should support a variety of technologies to ensure a seamless process, such as a driver’s license scan feature and prefill options. These tactics will lower the number of keystrokes an applicant needs to make, accelerating the process.
“The difference between fully digital account opening and what has been done by banks in the past is not just handling all the steps digitally, but completely reimagining the process for a digital world,” said Marous. “This includes, but is not limited to, user experience-driven responsive design, the need for simplified staging, and mobile identification verification.”
No lender wants to lose revenue to abandonment. MeridianLink® Portal offers consumers a consistent and user-friendly experience across all popular browsers and devices, making it easier and faster to complete their applications online. A consumer lending digital point of sale solution, MeridianLink Portal incorporates numerous features to create the most convenient customer experience for online applications.
Conclusion
Consumers expect fast and easy digital experiences in every part of their lives, including when it comes to online account opening and loan applications. If you’re still using manual and time-consuming online application processes, borrowers will likely abandon their applications before completing them.
Lenders can solve the problem of online application abandonment by integrating MeridianLink Consumer with MeridianLink Opening and MeridianLink Portal. These solutions help organizations increase approval rates, grow revenue, and develop powerful relationships to support a consumer’s financial journey.
Read our case study to learn how Rogue Credit Union uses MeridianLink Opening, MeridianLink Consumer, and MeridianLink Portal together to create a mobile-friendly experience, streamline online applications, and provide easy access to consumer documentation.
