How to Win in the Online Shopping Spree
More consumers are shopping for banking products online. Financial institutions that attract online shoppers have a lifetime of opportunity to gain.
The latest Deposit Insights report from Raddon shows that consumer interest in deposit accounts is exploding. Demand for a new savings account increased five-fold from 2018 to 2019, from 3 percent to 15 percent. As interest rates have risen, consumers have become eager to build their savings.
How do they plan to grow their wealth? Online.
Twenty percent of households shopped for a deposit account on a computer or mobile device in the past year. And they’re not online just to learn: More than half of consumers who opened a deposit account last year did so online.
Financial institutions that can attract and convert shoppers online stand to gain a lifetime of banking business; online banking shoppers trend younger compared to the overall banking population, and they’re looking for more entry-level banking products, such as checking and savings accounts.
Compared to 2016, more consumers think it’s worth their time to shop for the best rates online. The first place consumers look for rates is bank and credit union websites, followed by general internet searches.
And here’s an interesting search result: 66 percent of consumers visited a major bank’s website for information, but less than 30 percent opened an account with a major bank. Conversely, 50 percent of consumers told Raddon they opened an account with an online bank, even though less than 50 percent of consumers said they shopped online banks.
These statistics, plus other findings in the report, guide financial institutions toward three actions that can attract and win more deposit accounts:
1. Make Information Easy to Find and Understand
To capture the business of online shoppers, make sure rate and product information is clear and accessible on your web and mobile sites. Half of consumers told Raddon it’s important to shop for rates.
On your website, use commonly known terms – not banking language – to guide consumers toward the right product choices. The Raddon study found that traditional product names aren’t resonating with consumers younger than 50. For example:
When surveyed, almost no millennial consumers wanted certificate deposit accounts. However, when asked about a savings product that would earn a much higher interest rate but only if the consumer agreed to lock in their money for a certain length of time, nearly 50 percent of millennials showed interest. To them, a CD is what their dad puts in the car to listen to music, not an attractive savings product.
Think about the words consumers might enter into a search bar – or their motivations for saving – and make sure those are clearly addressed on your website.
2. Keep Products and Processes Simple
Compared to major banks, online banks had much higher conversion rates for deposit accounts. The reason? Simplicity.
Online banks generally have fewer product choices and one rate. And when it’s time to open an account, they excel at streamlining the traditional processes.
To convert shoppers into depositors, keep the application and funding steps as simple as possible. Make sure every step can be completed on any device, and leverage technology that consumers are accustomed to. Allow autopopulation of fields, verify information rather than require it to be re-entered, or let applicants photograph and upload documentation.
3. Create Seamless Transitions
Make it easy for applicants to transition from your website or mobile platform to another channel, especially the branch. When consumers walk into a branch, staff should be prepared (and incented) to help them continue an application from whatever point they left it online.
Because branch staff are adept at building relationships, they play an important role in growing deposit business. Every person has a reason to save and grow their wealth; branch staff are uniquely positioned to discover and guide consumers toward the right deposit products to achieve their goals.
The branch experience should also feel familiar compared to the online experience. Use color schemes, furniture or language to match the “look and feel” of your digital channels. Try to create the same consumer journey online, in-person.
Deposits are typically the start of a person’s banking relationship, meaning financial institutions stand to gain a lifelong accountholder once they land the first deposit account. But if that first-time depositor goes elsewhere? You might not get a chance to win them back for a decade or more. Consumers are holding onto accounts longer than they used to.
By meeting the needs of online banking shoppers, financial institutions can grow alongside the younger generations. Millennial and Gen Z consumers – which together outnumber all other generations combined – are just coming into their own financially.