Can Credit Unions Lessen Mobile Onboarding Dropout Rates?

One of the many reasons members prefer their credit union over a bank is they know their best interests are their highest priority. They’ve heard friends and family tell horror stories of bank accounts being opened unbeknownst to them and of mortgage rates increasing without an offer to help refinance, however members trust their credit union. When it comes to innovation on the mobile channel, credit unions as a group had apps deployed up to nine months before their big bank peers (Source: MX).

In the years since remote deposit capture first entered the scene in 2003, credit unions’ mobile capabilities have stayed shoulder-to-shoulder with banks’ offerings. For example, Alliant Credit Union was recently noted by Nerdwallet as having the best mobile app amongst credit unions. Alliant’s app checks all the usual boxes: ATM locator, transaction history, bill payments and balances on demand. Nerdwallet, however, found its mobile deposit and money management tools especially member-friendly with a variety of mobile app features that illustrate credit unions want to attract and keep members with a unique and value-added service offering.

However, there’s one thing that credit unions and big banks still haven’t managed to conquer: the high level of dropout rates with mobile onboarding. Research from Signacat showed a massive 40% of bank customers abandon applications after beginning the process.

Top Reasons for Dropouts

We are all aware that digital and mobile banking are becoming the preferred channels of choice for the masses. PwC’s Digital Banking Consumer Survey revealed 82% of millennials use mobile-only banking, and other research from Marqueta showed nearly half the consumers would consider switching from their bank to a digital-only provider.

Yet mobile onboarding dropout in the very early stages of the process remains a problem. The loss of potential revenue hurts even more so when you consider the cost of acquiring a new member is six-fold compared to retaining existing ones (Source: SignalMind). Let’s take a closer look at possible reasons for the high dropout rates.

• Failure rates: Just a 1% failure rate with an app, for example, can impact hundreds of thousands of members. And who wants that kind of negative feedback?
• Too much typing required: When you look into the reasons behind the aforementioned dropout rates, a driver for abandoning applications is too much manual typing.
• Requiring a commitment before they’re committed: Members want a seamless experience. That means downloading a native app can be a huge barrier and may be the point at which the potential member is lost.
• Too slow: American Banker reported that a vendor monitored page download times for mobile websites of several financial institutions and found the average response time was 15 seconds. This may not seem like a long time, but compared to user expectations of less than four seconds, it would certainly be a cause to abandon an application. In one evaluation, it found Bank of America had a 58-page element and 30-second download rate, while Charles Schwab, with a six-page element, had an average response time of five seconds. Expediency is an expectation.

Top Ways to Improve Mobile Onboarding

Remote deposit capture was a game changer by suddenly allowing thousands of customers (88%) to forego trips to the bank by taking a quick picture of checks for deposit. Imagine what 88% of credit union members adopting a new service would look like today!

The possibilities in mobile data capture have continued to improve over the years, yet many financial institutions have failed to embrace its capabilities, especially compared to other industries such as human resources or health care.

Here’s how credit unions can leverage the latest mobile capture technology to improve onboarding:

• Embrace artificial intelligence. Mobile capture is in the limelight again, and it’s all thanks to AI and machine learning technology. AI has recently provided real-time data capture technology, which means consumers don’t need to download a native app for onboarding; instead they can use the credit union’s web browser on their mobile device to automatically capture the images in real time and complete the sign-up process.
• Remove barriers. Other capabilities with AI-enabling technology include live stream video, instant translation into different languages, business card recognition and special document detection, which finds boundaries, crops images and corrects perspective. When you remove technology-related barriers to verifying identities and providing supporting documentation, the possibilities to onboard new types of products and services grow. For example, Cobalt Credit Union in Iowa is now offering mobile video banking as an option that can be used via smartphone or laptop. It allows members to do anything they would normally do face-to-face, even sign documents.
• Expand services beyond deposit and checking status. A great example for this is a mortgage application, where a member can submit their paystubs, proof of residence, passport, utility bill, bank statement, W2, etc. Users will no longer have to manually type in details like full name, date of birth and ID number, but will instead have these forms filled out automatically by holding their mobile device over a document, which will recognize and autofill. Additionally, all the supporting documents will be sent to back-end systems.
• Make it easier for mobile innovation teams to deploy. If members are happy using a native app, then ensure it’s one that fulfills their requirements, and do it quickly. New Mobile Capture Software Development Kits are making a difference for IT teams in terms of ease of integration, app capabilities and enabling customization for the specific needs of the customer.

Credit unions need to stay in the fast lane when it comes to mobile onboarding, and can achieve this by leveraging AI-enabled technology that will help cut those high onboarding dropout rates. The goal for any credit union should be to increase the ease of use of any mobile-based member touchpoint. This kind of seamless experience is what members are looking for and will result in higher completion rates. And that means more happy members!

Dr. Marlene Wolfgruber is Director of Product Marketing Mobile for ABBYY. She can be reached at wolfgruber@abbyy.com.