Banks Must Gain Insight Into Digital Sales—or Risk 'the Abandonment Problem'
Minimizing the number of questions and amount of information customers are required to fill in themselves is also key. Too often, the on-boarding process operates in a silo, separate from the bank's primary data stores, meaning the customer is asked redundant questions to which the bank already knows the answer. Similarly, different departments within the bank tend to introduce their own questions into the process, further inflating the application. Reducing the number of questions involved is a key way to reduce abandonment rates. Other typical examples include the overuse of capital letters or non-conversational English, as well as the lack of a "save and resume" feature, preventing a customer from starting an application online and finishing it with help from a bank employee.
Gaining Insight into the Digital Sales Process
These problems are often the result of in-house onboarding processes that have been designed and put together in an ad hoc fashion over time with the needs of the back office in mind. This is understandable; the focus to date has primarily been to get online applications running in the first place. However, many banks are now starting to take a more sophisticated, customer-centric approach to the digital sales process, tailoring the experience to minimize abandonment.
Central to this effort is the use of Big Data and analytics to shine a light on what's really going on during the application to see where customers are dropping out and—crucially—why. Up until now, the analytics capabilities available in this area have been limited and top-level; you could see whether customers were dropping off from a mobile or desktop device, but not much else. But with the latest technology, it is now possible to get a far more granular picture. This involves, for instance, seeing how long users spend on each page, which fields and questions they struggle with the most, where errors are made, where the customer is using prefills as opposed to entering information directly, and so on. And this can all be done through metadata, avoiding any data confidentiality issues.
Once armed with an accurate and detailed picture of the user experience, tweaks and improvements can be made and then tested, creating a feedback loop. Abandonment rates can typically be reduced from 85 percent to 50 percent in a short amount of time simply by addressing these common issues.
This is only the beginning. With continued analysis and improvement, the rate can be driven down a lot further still. The nearer it can be made to zero, the closer the bank will be to making every dollar of marketing budget count.
In many ways, this represents the "catching up" of digital sales to marketing and services, where many of these Big Data/analytics principles have been in play, to a relatively sophisticated degree, for some time. It goes beyond the abandonment problem, too; more granular insight—with breakdowns for age, gender, background, device, and so on—also opens up the possibility of tailoring the on-boarding process for different groups of customers with different preferences and needs in the future.
The application of Big Data and analytics to this critical step in digital banking is inevitable. As more and more banks adopt this approach, information about who is doing it well—and not so well—will wind its way into the public domain. As always with these things, those that move early will gain an advantage. In a tricky market environment characterised by squeezed revenues, high competition, and low interest rates, there is probably no easier or lower-cost way to boost revenues and cut waste.
Don Bergal is the chief marketing officer at Avoka, where he leads worldwide marketing. Bergal has a 25-year record of growing technology businesses in marketing, operations, and sales management, particularly with early-stage and high-growth companies. Prior to Avoka, Bergal was chief marketing officer and COO at Confio Software, acquired by Solar Winds, where he led the creation of the marketing-sales "factory" from the earliest stages, resulting in repeated 70 percent annual growth in the latter years of the company’s 10-year life. Bergal has also had stints at Antepo (acquired by Adobe) and Jabber (acquired by Cisco).