In the race for deposits, speed and convenience matter to customers

Despite the Federal Reserve’s interest-rate hikes seemingly behind us, banks in 2024 are still facing pressure when it comes to attracting and retaining deposits. Everywhere you look, banks are competing by offering highly attractive rates — some north of 5% — in an attempt to hold onto depositors. Consumers are also more aware of their options than ever before. With the rise of digital, it just takes a few seconds to search and compare financial products online.

So the question becomes: What can financial institutions (FIs) do to cultivate strong relationships with depositors in a highly competitive environment?

Strong pricing, a good brand reputation, marketing spend and relevant products with flexible terms are all important factors. But to win real relationships, banks must provide meaningful value by helping their customers make smart financial decisions that are easy to fulfill.

Leveraging technology to fill the gaps

This is especially true in the deposit account opening process. In many cases, bankers and consumers are still required to complete separate applications for each deposit account they intend to open. Opening two accounts takes two times longer, requires duplicative data entry, and is two times as expensive than opening one account.

Let’s walk through a scenario: Adam currently has $100,000 of investable assets in a standard savings account, earning him 0.9% APY. He sees an ad from a local bank offering a CD with varying maturity terms yielding between 4.2% and 4.8% APY, and money market savings accounts with variable rates at 4.4%. Adam sees he can gain four to five times his return by moving the money over and decides to open four different accounts.

Challenge: Adam visits the bank’s website and begins the process, but as it turns out, he can’t open all of these accounts at the same time, and needs to complete four separate applications. This is taking too long, so Adam decides to abandon the process and stop in to a local branch. Once again, Adam is frustrated to hear they need to open each account individually, taking as much as 50 minutes to complete. Adam leaves frustrated without opening any accounts, and the bank loses a potential new depositor.

As you can see, the cumbersome account opening process has significant implications. Bankers end up spending too much time on data entry and manual verifications, and not enough time on relationship onboarding. Consumers end up frustrated due to the duration and complexity of opening multiple accounts.

But luckily for everyone, technology always has a way of solving the most complex banker and consumer challenges by creating streamlined, digital experiences.

Simplifying the account opening process

Through a shopping cart experience for account openings, banks and credit unions now allow a consumer to select and customize various types of accounts such as savings, checking and deposit accounts within a single application.

This saves meaningful time and effort — for everyone. Bankers can minimize time doing manual data entry and spend more time doing discovery with customers, understanding their financial needs and helping them select the products that make sense for their financial goals, all in one application. As a result, bankers can establish and expand multi-product relationships in the time it takes to open a single account, while reducing abandoned applications and better managing the cost of origination.

At the same time, consumers can open multiple accounts with one application, and maximize potential cross-account benefits such as preferential interest rates, reduced fees or enhanced rewards programs. Consumers will be empowered to design a personalized financial strategy and allocate specific funds to each account category.

The bottom line — attracting new depositors can be made easy by creating a seamless and simple way for consumers to make smart financial decisions.

Nima Ghamsari is Co-founder and Head of Blend.