With a significant shift in consumer attitudes about debt and increasing regulation, financial institutions are placing a greater focus on Demand Deposit Account (DDA) openings. This is the best way to create new accounts and become “sticky” with their customers. If FIs execute this fundamental banking relationship well, by providing a superior customer experience and product, the door will be opened for cross-selling other deposit, investment and credit products. The stickier a customer relationship becomes through multiple accounts at one institution, the less likely they will be to move their money elsewhere.
There are several opportunities FIs can employ to enhance their approach to DDA:
- Provide an exceptional customer experience. This is just as important as the product pitch and technology used behind the scenes to make the right offer. Bottom line, a great DDA offering begins with the customer.
- Incorporate a richer set of consumer data sources into the decisioning portion of the account opening process. This helps weed out the bad and secure more of the good. A hosted DDA solution brings the advantage of one connection to many data sources, meaning fewer headaches when it comes to integration and managing failover.
- Utilize instant decisioning at the point of sale. This improves the customer experience and ultimately opens more accounts.
- Provide DDA opening and instant prescreen capabilities in the same platform to enable shared logic. Not only can efficiency be increased by updating business logic in one place, but integrating these capabilities allows for more effective cross-sell, relationship pricing and debit rewards decisioning. Additionally, with more accounts being opened online banks need to support multi-channel integration for their DDA offering.
- Implement an offers repository to easily review past offers made to individuals across all channels and lines of business. Storing offers in a central location supports multiproduct cross-sell and allows institutions to make multiple tailored product offers to a customer. This decreases the friction created when a customer is offered the same product during every interaction and saves the cost to re-decision each time an offer is presented.
It is important for banks to focus on differentiating their DDA offering from their competitors and make it appealing to a broad customer base. Recognizing that additional data sources will bring a new level of intelligence to the account opening process, helps banks better serve their customers and protect their brand. Traditional DDA data sources (such as closed for cause, fraud, KYC and OFAC database information) are still relevant, but do not provide a complete picture. FIs that successfully incorporate a more streamlined process to DDA opening will recognize lower costs and promote more product sales.
