Online Account Opening: Raising the Bar

July 24, 2007

Abstract

Boston, MA, USA July 24, 2007

Celent estimates that fewer than 2% of US financial institutions are offering automated online account opening capabilities today, a figure that will increase to between 18% and 20% by 2010.

Streamlining account opening processes is an imperative for financial institutions of all sizes in their quest for market differentiation and high customer satisfaction levels. Ensuring a fast and customer-friendly account opening process can help stem attrition rates, drive effective cross-selling, and have a direct impact on a financial institution's top line.

In their drive to achieve the ultimate goal of a universal, enterprisewide account opening platform, many institutions are finding that the online channel is a natural place to jumpstart their customer acquisition efforts. As credit card companies and direct banking stars have found, online origination can be a powerful tool for capturing customers and deposits. Financial institutions are eagerly seeking the many benefits associated with automated online account opening, including the ability to: capture client assets more quickly, increase account opening completion rates, reduce processing errors and costs associated with manual processing, improve cross-sell ratios, and standardize the decisioning process. In short, automated online account opening can allow financial institutions to lower customer acquisition costs while improving the customer experience.

"Banks must focus on improving the quality of their interaction with customers at the point of acquisition across all channels or risk losing deposits to more nimble players. Ultimately, the goal is to implement a paperless and customer-friendly account opening process that takes place in minutes, rather than days or weeks," comments Madhavi Mantha, author of the report and senior analyst.

In the report, Celent provides an overview of the account opening process, discussing the challenges faced by financial institutions as well as the characteristics of a best practice enterprisewide account opening platform. The online account opening process, from application capture to account funding, is described in detail and the key requirements for implementing a streamlined and paperless online account opening solution are highlighted. The report also profiles leading vendors of automated online account opening technology including Andera, CashEdge, Online Resources Corporation, Parsam Technologies (uMonitor), and Yodlee.

The report is 42 pages and contains ten figures and nine tables. A table of contents is available online.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Executive Summary 3
The Account Opening Process in Need of Repair 5
Lifting Up the Hood 8
  The Goal: Enterprisewide Account Opening 8
  Achieving the Goal 11
Jumpstarting Online Origination 13
  Online Origination of Deposit Accounts 15
  The Online Process: From Application to Funding 17
  Key Considerations 21
Technology Landscape 23
  Andera 25
  CashEdge 28
  Online Resources 31
  Parsam Technologies (uMonitor) 34
  Yodlee 37
Concluding Thoughts 39
Objectivity and Methodology 41
 

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