I’m on Top of the…Sales Funnel?!
FIs spend most of their marketing dollars on account acquisition. In fact, in 2017, the US financial services industry will have spent $10.1 billion on digital advertising, a 13.1% gain from 2016, according to eMarketer. But for all this spend there’s been almost no innovation in this space. And that lack of innovation is losing customers and costing FIs millions. It’s time that FI’s begin to ask:
- Is there a better model?
- How can the account opening process be improved upon for an easier flow for the end user?
In a previous post, TradeIt conducted time trials to open a new brokerage account on mobile. Completion of those applications ranged from 6 to a staggering 12 minutes. So what were the pain points and causes of abandonment?
- Too complex
- Too many steps
- Took too long
- Required information not readily available
The biggest challenge in a mobile age is that none of the account opening processes are “native to iOS” (or Android) and all require users to go to a responsive web application that’s driven from the 20-year old Affiliate link model that was designed for desktop. So, with each additional minute and extra field to complete, or with clunky mobile interfaces, the number of completed applications falls significantly. There goes your sales funnel…and your profits.
Bye, Bye, Bye
According to Forrester, 54% of people filling out financial application forms abandon prior to completion, and on top of this, a recent study by SaleCycle saw financial abandonments reach an average of 79.3%. This is a huge, wasted opportunity considering that customers who attempt to complete an application are expressing a genuine interest in your products and services. In other words, if your process is quick and easy, they will complete their sign up quickly and easily. If it’s not, then you’ve lost a customer and revenue.
As you can see below, Acorns’ account opening flow is super streamlined, moving the user from beginning to end in an easy progression of screens with limited questions.
Dollars are moving to mobile, but no one is fixing mobile
By 2019, advertisers will spend more on mobile than all traditional media, except television, put together. Why? Because that’s where the eyeballs are. And your customers. According to Zenith, mobile ad spending for 2017 grew 34%, to $107 billion.
FIs that respond to this need and continue to ramp up their already heavy investment in both the online and mobile channels will be better positioned to drive incremental sales, build customer loyalty, and provide an outstanding customer experience.
Innovate to Acquire
Meeting long-term customer acquisition goals for an FI requires identifying and capturing market opportunities while staying ahead of the competition. In a world of specialized products for highly segmented target audiences, being able to launch a new bank customer acquisition program faster than the competition means getting the largest part of the market share. For every month of delay, some of your customer base moves to another product with a competitor. That lost revenue over time accumulates and creates a revenue gap that will never be filled.
At the Benzinga Global FinTech Awards last week, the big brokers spoke about the need for innovation. TD Ameritrade cited:
- 40% of their trading is happening on mobile
- They are doing 250,000 trades/day
The brokers on the panel—which included TD Ameritrade, Schwab, Interactive Brokers and TradeStation—agreed that constant innovation was a necessity in an age when retail brokers interfaces are being compared to Amazon and Google for being clean, easy and intuitive. As we highlighted in a post last year, 72% of millennials would rather bank with Google, Facebook or Amazon than their existing financial institution. The mobile experience is key to this and easy interfaces are what will get them to visit and stick around.
Quick and Easy
What Robinhood, Acorns, and Stash get right with their native/mobile-enabled tools is to allow users to open an account in under 5 minutes. Why? Because those tools were built from the ground up with mobile—and the end user—in mind. They know what’s important when looking at customer acquisition and creating that experience:
- Hone: Get the message right
- Streamline the process: avoid pitfalls that will cause potential clients to abandon the flow
- Focus: Only include the must-have know-your-customer components
- Make it native: If you do one thing and one thing only, make it native
Friction Isn’t Fiction
Everyone working in fintech should know that reducing friction at key transactional points in your user journey is critical for adoption, conversion and repeat long-term use. Just remember that your users don’t necessarily understand the ins and outs of why the financial industry has to do some of the things it does. So while they expect it to be complex and difficult, those who can make it easy and fast will surely win the acquisition game in the long run.