2010 New Account Onboarding: Using a Systematic, Tactical Approach to Deepen Financial Customer Relationships

2010 New Account Onboarding
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Overview
The initial days and weeks after customers open a banking account are critical. What happens then can determine how customers use the new account, whether they break ties with their previous institution, how deeply the banking relationship will develop, and — ultimately — whether new customers will be loyal, satisfied and profitable. Too often, however, financial institutions strategically segment and woo new customers but then rely on one‐size‐fits‐all methods that fail to capitalize on the customers’ diverse preferences and banking needs during the crucial “onboarding” process when the relationship is most tenuous. Javelin’s onboarding model examines how three basic bits of information about a new customer — their age, their income, and whether they switched banks, are new to banking or are “underbanked” — can serve as a foundation for an onboarding process that welcomes new customers in a systematic, tactical fashion. This model identifies preferred contact channels and critical onboarding messages based on consumer survey data relevant to a customer’s age, income, and experience as a banking customer.

Primary Questions:

  • What is the ideal channel for welcoming new customers?
  • What messages are likely to resonate most with various consumer segments?
  • Should onboarding focus first on engagement or on cross‐selling?
  • Can onboarding be used as a vehicle to encourage customers to opt in for overdraft protection?
  • Can onboarding shape the channels and services that customers adopt?

Methodology

This report is based primarily on data that Javelin collected online from a random‐sample panel of 5,211 household finance managers in March 2010; the overall margin of sampling error is ±1.36 percentage points at the 95% confidence level.

The survey targeted consumers based on proportions of gender, age, ethnicity, and income representative of those of the overall U.S. online population. Rounding (in the underlying numbers) in the figures included in this report accounts for the slight differences in totals.

The majority of Javelin data is based on “online households” vs. “individual consumers,” which is a typical way of presenting online banking data because account management generally is collected on a per‐household basis. In 2009, the U.S. population was estimated to be 306 million. That number includes 232 million adults, 118 million households, and 86 million households that are online. On average, about 2.6 people reside in each household. Javelin also collects online‐banking data using a base of all consumers for comparison purposes.

This report focuses on key segments to target, based on customers’ reason for choosing a financial institution and customers’ generation. Here is how Javelin defines those segments:

• Newly banked: Opened their first checking account in the past three months.*

• Switchers: Switched primary financial institutions in the past three months.

• Underbanked: Had no personal or joint checking account.*

*The newly banked and underbanked might have existing savings accounts, investment accounts or other financial products.

• Gen Y: Born 1979‐1999

• Gen X: Born 1961‐1981

• Baby boomers: Born 1945‐1965

Javelin uses overlapping 20‐year periods to define baby boomers (1945‐65), Gen X (1961‐81), and Gen Y (1979‐99). That means Gen Y consumers were 11 to 31 years old in 2010, though Javelin’s survey data reflects only those who are adults. Javelin forecasts that by 2018 Generation Y will compose 28% of the total U.S. population with 91 million people, Gen X composes 27% of the population with 88 million people, and baby boomers composes 23% of the population with 77 million people.1

Preview of New Account Onboarding


Companies Mentioned

Huntington Bank Wells Fargo Bank
KeyBank Zions Bank


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