We just completed our latest Online Banking Report. It will be mailed to subscribers this week.
It's also available online here. There's no charge for current subscribers; others may access it immediately
for US$495.

---------------------------------------------------------

Improving Online Account Opening ROI
Ten strategies to increase online application conversion rates

102 pages (published 21 June 2009)

In this report (abstract PDF), we focus on ways to increase conversions and improve your results when opening financial accounts online or over a mobile phone.

The online application is the new branch new-accounts desk. And, just as you provide ongoing support, training and incentives to branch-based sales staff, you must continually fine-tune your online sales process.

In our experience, this is an area that needs attention at most financial institutions. Things have greatly improved during the 10+ years we've been tracking online applications. However, during the research for this report, we reached dead-ends at three of the 10 applications tested (note 1). That just can't happen.

The report outlines a 10-step approach to improving the process: 

• Direct users to the application
• Set expectations
• First things first
• Guide customers
• Bundle mobile access & alerts
• Upsell
• Fund
• Ask for referrals
• Stay in touch
• Humanize the process

We reviewed the online applications of the following companies:

• Bank of America
• BECU (powered by uMonitor)
• Capital One
• Chase Bank
• First Arkansas Bank & Trust (powered by FirstROI)
• Flagstar Bank (powered by uMonitor)
• HSBC Direct
• Huntington Direct (powered by CashEdge)
• M&I Bank
• National City
• Verity Credit Union (powered by Andera)
• Wells Fargo
• Zions Bank

Finally, a 10-year forecast for online account-opening volumes in the United States is presented.

M&I Bank has an attractive and informative application start page (9 June 2009)
Note: The online banking guarantee at the bottom is a good way to improve user trust.

Note:
1. Granted, user error was the problem in two of the three failed apps; however, we weren't purposely trying to make mistakes. The online application should have provided assistance in correcting them, rather than leaving us hanging.

First reported by Bank Deals today (see note 1), Huntington Bank has recently launched a new direct bank, called DirectHuntington <directhuntington.com>. It goes against the naming convention of having "direct" follow the main brand name, but it shouldn't make too much difference. Still, the bank should secure domain-name rights to HuntingtonDirect.com, currently used by New.net Inc to post a few generic banking links and throw a pop-up or two at unsuspecting users. 

Huntington chose a color palette that makes it stand out from other financial institutions, a good move. However, the yellow 5.30% APR doesn't stand out as well as it should given its importance in the purchase decision (see sceenshot below).

But once again the CashEdge-powered online application leaves a lot to be desired (see previous coverage here and second screenshot below). But before you can even see the application, you must agree to the "Consent for Electronic Disclosure," a terrible first impression for someone who's thinking of sending you ten-grand or more (see screenshot below).

The upper-right Online Guarantee is a nice touch, but it links back to the main Huntington site which might be confusing for users (see screenshot below).

There is no mention of DirectHuntington at Huntington's main website <huntington.com>. However, there's a secret code (anywheresavings) you can enter into the Special Offers box that takes you to the direct banking site. 

*Yet another direct bank

Note:

1. The Bank Deals writer had a relatively uninspiring call with DirectHuntington's customer service when he researched the account. 

It's no secret that a vast population researches online and buys offline, as much as 50% of your customer base according to recent research by Yahoo Search Marketing (NetBanker April 24). Whether the practice has evolved from habit, security reasons, or a need for face-to-face interaction, it's an important dynamic for financial institutions that have billions invested in retail branch networks.

Until consumers are ready to give up the branch experience, an important function of financial institution websites is to funnel prospects into the branch. Most banks now have prominent branch/ATM search functions.

These tools, often outsourced, usually provide good utilitarian results: name, location, hours, phone, and directions. This is enough information for current customers just looking for the closest place to pick up $100 with no ATM fee or deposit the rebate check from Procter & Gamble.

But as a sales tool for prospects considering a major purchase such as a new checking account or mortgage, the typical "branch finder" leaves a lot to be desired.

Analysis
Considering how inexpensive it is to post content online, why is it that banks do so little to help their branches create a unique presence online? After all, bank "stores" are usually multi-million dollar operations with aggressive sales and profitability goals. Even our tiny US Bank branch, staffed with two or three employees, plus a security guard, is surrounded by $500,000+ homes where the largely middle-class owners often have equity of $300,000 or more.

Why doesn't my branch use every tool in the book to tap into this market? Just one or two additional home equity loans per year would pay for a killer website. 

We know the reasons banks keep branches from attempting their own creative marketing efforts: low-budget fliers may not align with company graphic standards; complicated disclosure rules must be followed; branch efforts might conflict with larger "branding efforts," and so on.

Those arguments don't hold as much weight online. Banks could employ a content-management system that allowed branches to customize their personal webpage for use in neighborhood marketing efforts, and that would be more likely to pull a website visitor into their branch.

While we've reported on several of these efforts over the years, it's still difficult to find a comprehensive "bricks-and-clicks" effort. We recently came across Thatsmybank.com from Sacramento-based First Northern Bank (click on screenshot upper left). While the bank does better than most with a branch page that includes a picture of the branch and branch manager along with the names of lending officers, it is still very basic. It doesn't even include the email address of the branch or any of the key contacts.

Mortgage banks have done a better job. Wells Fargo Home Loans has had individual Web pages for its lending offices for several years. Huntington Bank also provides each mortgage loan officer their own Web page (click on inset for closeup). The page is tightly controlled. The mortgage officer uploads a picture, fills in basic contact info, then adds a paragraph about themselves and their lending specialty.

The template is completed with a list of local links provided. The only interactive element is the mail-to link that allows visitors to send an email to the loan officer via the user's email client.

Action Items
We believe branches should have a larger Web presence than just name, address, and phone number. Consider installing a content manager that allows branches to input custom localized content. It's a cost effective way to help branches and loan officers leverage their community connections and unique expertise.

--JB

Huntington Bank (Columbus, GA; $28.4 billion; 132,000 online users) greatly expanded its online service offering as part of its migration from the S1 platform to Corillian and E-Bank LLC  www.ebancllc.com  The most noteworthy improvements:

•    same-day bill payment, payment requests received by 4 pm (M-F) are sent out the same day
•    real-time information posting
•    check images available online