What’s your onboarding strategy

Years before we had the idea to create the Digital Onboarding platform, our executive team worked at Andera, which built the first digital account opening platform. We saw firsthand that a lot of checking account openers never turn into deep and profitable relationships. That, and a conversation with DCU, inspired us to dig deep and understand what banks and credit unions are doing to drive early engagement.

We discovered that not much has changed in the past couple of decades. Institutions have been employing the 2x2x2 onboarding strategy since we got our first flip phones.

Banks and credit unions that follow the 2x2x2 strategy communicate with new account openers two days, two weeks, and two months after a checking account is opened. It’s usually done with a mix of mailers, phone calls, and maybe some emails. As an industry, we can do better.

When someone opens a checking account, institutions face an age-old challenge: Motivating customers and members to use the product they opened. It sounds easy enough. After all, why would someone take the time to open an account and not use it? Friction - a lot of it.

Checking account openers have a lot to do:

Activate their debit card
Update their default payment methods at merchants like Amazon®, Venmo®, and Uber®.
Enroll in direct deposit
Enroll in online banking
Download the mobile app
Sign up for eStatements

Banks and credit unions are expecting new account openers to do a lot of work. So it’s no surprise that 25 to 40 percent of new checking accounts are closed within the first year.

And the list goes on…

Here’s our beef with the 2x2x2 strategy:

Two days is too long to wait: It’s been cited countless times, but it bears repeating: Companies like Amazon® have changed consumers’ expectations for immediacy. Account openers should not have to wait two days to hear from their financial institution.
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Thank customers and members with an instant email or an instant text message. Link your messages to a personalized website that helps them understand what they need to do next.
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If someone previously enrolled in digital banking, help them enroll in other services like direct deposit and eStatements. This is where traditional approaches fall short: Asking a digital banking user to register in digital banking makes customers and members feel like you don’t know them.
It’s making you look old school: Many 2x2x2 programs consist of a short series of mailers and phone calls. How can you show off your slick digital capabilities that way? You can’t.
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There are other pitfalls of traditional tactics: Mailers are expensive, and results are nearly impossible to measure. In addition, phone calls typically lead to voicemails, if they ever get made at all.
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The best way to impress someone with digital banking features is to show them off in a digital medium.
It assumes that everyone is self motivated: Life happens, and people procrastinate, especially when things seem tedious. It’s important to remind new account openers early and often about the steps they need to take, and three touch points aren’t going to cut it.
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JD Power & Associates found that new account openers should receive five to seven communications from their financial institution in the first 90 days. Yet, the majority of banks and credit unions don’t communicate often enough.

Check out our Checking Activation Best Practices Playbook for our advice on the ideal outreach strategy.
Account openers need help. Communicating isn’t enough. If your bank or credit union isn’t giving people access to digital tools to make adopting account-related services easy, you’re making customers and members do all of the work. That’s a key reason why the largest banks bribe customers with cash bonus incentives to enroll in direct deposit.
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Sharing a PDF form to sign up for direct deposit feels like 2005.
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Telling people to enroll in digital banking when they can’t remember their account numbers is pointless.
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Asking people to use their new debit cards without helping them update their default payment methods assumes that customers and members have plenty of time on their hands.
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We’ve come a long way in the past couple of decades. The right digital tools can eliminate friction and give your institution a reputation for being accessible and delightful to deal with.
If someone isn't engaged within two months, it's probably too late. At the two-month mark, most institutions start cross-selling. Trying to cross-sell to people that never engaged in the first place is a losing battle.
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Customers and members that opened a checking account but aren’t using it are only slightly more receptive than a cold prospect. But, on the flip side, when they are engaged, they are four times more likely to turn to your bank or credit union when additional financial needs arise. Even better? Customers and members that hold three or more products with your institution are ten times less likely to turn to a competitor.

In Summary

The 2x2x2 onboarding strategy seemed pretty bright a couple of decades ago, but we can do better now. Banks and credit unions that harness the power of digital tools and channels to eliminate friction will enjoy a reputation for being accessible and easy to deal with. They will also enjoy the financial benefits that come from serving customers and members that are fully engaged.

Fixing the new customer and member onboarding approach is one of the simplest ways that financial institutions can better compete, grow, and thrive. For more information and advice on this topic, visit our Resources page.

Digital Onboarding grabs $58M to help banks with profitable customer engagement

We can do better.

Checking account openers have a lot to do:

Here’s our beef with the 2x2x2 strategy:

In Summary