In the fight for deposits, user experience and trust are paramount

As more consumers consider switching banking partners, is your community financial institution ready for them?
Mar 29, 2023
Erin Mincer
Sr. Content Marketer
Ryan Donaldson
Sr. Content Marketing Manager

According to a recent poll conducted by Morning Consult, while only 5% of consumers moved their primary bank account as a result of the recent bank failures, 23% of consumers are considering starting a new banking relationship in the next six months – an 8% increase from February. 

While this is an uncertain time, it is also a moment of great opportunity, especially for digital account openings. According to a FICO study from 2021, 71% of respondents in the U.S. said they would be willing to open an account digitally. Is your community bank or credit union prepared? Through an enhanced onboarding process, integrated digital experiences, and a stellar referral program, you can be. 

A product experience that creates ease and convenience  

You only get one opportunity to make a first impression. When the goals are to grow deposits and build strong relationships with new digital banking users, that opportunity comes when they decide to start a digital application.

If a prospective user takes action and starts a digital application only to be met with a slow and poorly designed process, they’ll leave. You’ve made an impression alright, but not a good one.

To help new customers and members see the true benefit of digital account opening, it’s critical not to pollute their digital experience. Asking too many unnecessary questions or being overly aggressive with a variety of products gets in the way of what really matters: high application completion rates.

Narmi has found that the most powerful lever for consistently high application completion rates is an onboarding flow designed for speed and accessibility. 

Incorporate digital in an increasingly connected world

Outside of the banking industry, there are countless examples of positive, even rewarding, onboarding experiences that exemplify making a good impression. And with the rapid acceleration of digital over the past few years, expectations for the role digital plays in nearly every aspect of daily life have changed – a point that was emphasized by VP of Customer Experience and Innovation at Publicis Sapient, Jonathan Alloy at our 2023 Innovators Retreat.  

“You don’t necessarily think about what’s my best banking app. You think about ‘what are the best experiences I have across the board?’” – Jonathan Alloy

Whether it be travel, entertainment, or gaming apps, consumers are constantly immersed in digital experiences, making an amazing digital product the rule (and not the exception). This also means there is an expectation that their digital experiences are well integrated both on and offline. 

Since community banks and credit unions leverage branches to help further build relationships with customers and members, it’s important to consider that the digital experience should not end with their digital account opening process. J.P. Morgan’s Global Payments, Consumer Goods & Retail leader, Lucia Li spotlighted the importance of integrating digital into all touchpoints to ensure continuity and offer an enhanced experience. 

“Many of you have branches and physical outposts where you’re meeting customers[…] So that’s something to think about as well[…] How is digital incorporated across all the touchpoints you have with your customers?” – Lucia Li 

Trust the (referral) process  

Especially in the wake of the recent bank collapses, trust is more crucial than ever. As Jonathan Alloy highlighted, it’s important to consider how much trust you have instilled in your own financial institution. One way to measure this is by pondering if you would encourage your family to do business there. 

“Would I want my kid to bank here? Would I want my parents to retire their savings with me? Not because I want to make money… but because I feel like I trust the brand and I’m comfortable doing it.” – Jonathan Alloy 

As interest rates continue to rise, consumers are looking for new banking partners that can offer them the best deals and support, an area where community financial institutions often excel. When making the switch, some consumers may specifically be searching for better rates on products such high-yield savings accounts or CDs. Under these circumstances, while a higher interest rate may bring in new customers and members, it is the digital experience and customer service that will get them to stay. 

Other times, especially in the current moment when the industry is looking to rebuild consumer confidence, potential customers and members are turning to their close circles for recommendations. In order to ensure your financial institution secures these lower-cost funds (such as checkings and savings account deposits which bear little to no interest and thus increase margins), it is important to leverage the trust you have built with your current customer or member base. 

One way to accomplish this is through a brag-worthy referral program. Word-of-mouth recommendations are also more dependable and seen as less risky because they’ve already been vetted through a trusted network. On top of that, referred customers and members are also more likely to engage with your digital products at a higher rate, and have a greater lifetime value, even during times of uncertainty. 

While there are undoubtedly headwinds facing the banking industry, the positive consumer sentiment towards diversifying banking partners signals a huge potential for community banks and credit unions to increase (and retain) low-cost deposits. 

Scalable digital growth starts here

Explore the digital account opening strategies banking experts use to grow deposits and deliver impressive digital experiences.
Get the whitepaper
Narmi Inc.
3 East 28th St. Floor 12
New York, NY 10016

In the fight for deposits, user experience and trust are paramount