June 6, 2007
Online Account Opening Attracts Consumers And Banks
Writer Karen Hoffman’s profiles CashEdge CEO Sanjeev Dheer’s view that online account opening and funding is a competitive advantage for institutions of all sizes. Based largely on his presentation during a Webinar on May 3rd of this year, Hoffman’s article sites multiple statistics supporting Dheer’s case.
“… CashEdge's own October 2006 survey of 400 online banking customers found that 78% of these customers would open accounts over the Internet. Top financial providers that have begun to offer online account-opening to their customers have already experienced a dramatic surge in the use of this service, according to Dheer.”
“He cited the 2006 announcement by Citigroup Inc. that it had gathered $3 billion in new deposits within just a couple of months of offering its own online savings product. Similarly, Charlotte-based Wachovia Corp. reported in 2005 that it was opening nearly 15,000 accounts per month online, according to Dheer.”
“…because the online account approval and funding process is instant, Dheer estimates that between 50% and 70% of customers who apply actually complete the process. He suggested that banks make more of an effort to contact customers who did not complete the process. ‘Banks need to go after this low-hanging fruit,’ he said.”
“Dheer said that more banks are choosing to buy a solution for online account opening, as opposed to trying to build it themselves, particularly since the back-end tools that allow a bank to verify the customer's identity, sign and fund the account are complex and difficult to replicate.”