Students Learn Financial Illiteracy Lessons in Digital Onboarding Challenge

Rejection though silence, overwhelmingly complicated choices, and inadequate, directionless procedures. These are among the digital banking challenges faced by students trying to apply for banking and credit card accounts.

New York City-based Lightico, which provides a customer experience platform, organized a social experiment to observe the digital onboarding challenges faced by college students at Bank of America, Capital One, Citi, and Wells Fargo.

“Customer expectations are changing, which is especially true for banks now that Gen Zers are becoming part of their customer base,” Zviki Ben-Ishay, CEO and co-founder of Lightico, said. He added, “Younger generations, who grew up in a time of constant digital connectivity, are used to immediate and seamless service through the apps they use in their everyday lives, like Netflix and Uber, and now it is what they expect from every interaction – even their banks.

The Lightico CEO explained the social experiment’s design was to understand to what extent financial institutions are reaching younger generations and offering the digital and mobile solutions they expect. “We discovered a disconnect between the experience young consumers want and the experience they get from using some of the world’s largest banks’ mobile apps. If financial services companies want to appeal to younger generations, they are going to need to redouble their efforts to improve their digital and mobile processes to provide a flexible, consistent, immediate and frictionless experience.”

Some of Lightico’s findings:

• Forty percent of the young consumers abandoned the onboarding process when applying for a bank account.
• Banks rejected students without providing an explanation of the denial.
• Students directed to a website or a branch when trying to apply in the mobile app.
• Students overwhelmed by the number of credit card options and lack of information on each.
• Students felt the chatbots did not properly guide them through the process.
• Students signed off on terms and conditions they did not read.
• Students reported the process taking longer than the application promised.
• Some bank’s homepages only gave the option to open a bank account (not credit cards).

Instead of writing about millennials and Gen Zers, Lightico created a blog so students could describe what it is like to apply for bank accounts and credit cards through mobile apps and online. They noted in the preamble to the blog, “For banking executives: This is the actual voice of customer data – it records their experiences, written in their voice, only edited for clarity. While these stories are anecdotal, they paint a clear picture of the state of industry efforts to onboard this audience. It behooves us, as an industry, to take note of the range of issues – from knowledge gap, technical issues, to the occasional CX gap these customers experience. In most cases, these college students were unable to complete their applications successfully. So, as a result, these banks and credit card companies have missed out on the potential for new lifelong customers.”

“As college students, our ability to spend money, buy things and go to music festivals is at an all-time high. But, we admit, our financial literacy is pretty low,” one student admitted.

Lightico noted, “The guide was put together to highlight the small victories that exist in consumer retail banking, and call attention to some of the pains that are still being experienced by customers like us every day.”

One student wanted to open a checking account. “Some personal information was all it took for me to sign up, add in my social security and boom! I’m in. They even told us it was easy, right? What could possibly go wrong?”

The student described linking the account to an existing account at another bank before returning to in my browser and then back to app of the bank with the account opening application. “Wow, that’s a lot of jumping around.” And then came the credit card. “All I need to do is sign up for a credit card. But where is the form? Argg. It is nowhere to be found on the website.”

After trying customer service for help, the chatbot directed the student to visit a website or a branch? Upon visiting the website, the would-be card applicant faced a choice of eight different options of cards without an explanation or knowledge the differences. That was not the end of the story, unfortunately.

Other students documented problems of having to blindly select the best account option for them, incorrectly promising a speedy application process, providing no options for part-time employees or college students, no application response, trying to understand overcomplicated credit jargon, and timing out while completing an application.

“What became evident was that despite all the digital banking progress, there is lots more that needs to be done to close this millennial onboarding gap. The combination of student’s low financial literacy, their high expectations for usability and immediacy, led them to sour on some objectively good approaches. And, while banks are moving in the right direction, the opportunity is great but student patience is low,” the report suggested.

Lightico indicated financial institutions have reached a strong level of digital interface and customer experiences have overall been climbing. But to serve this audience, everything needs to be even easier and faster. “Even if an application is rejected, they want it to be on the spot. If a customer chats with a representative, then they want to complete their customer journey right then and there. This is the bare minimum today.”