Banking has undergone significant changes over the last decade. Older generations used to visit bank branches for most transactions, but younger people, such as Millennials and Gen Z, have preferred digital banking from the start.
Now, bank customers of all generations expect to open accounts and manage their finances online, without needing to visit a branch. This shift is part of a larger digital transformation across the banking industry.
To stay competitive, your bank or credit union needs to adapt and offer more solutions, like digital account opening software that delivers what customers want.
Generational Differences in Banking Behavior
Older and younger generations were once at opposite ends of the spectrum when it came to doing their banking. While older generations, such as Gen X and Baby Boomers, once preferred to visit a bank branch for their banking needs, things have changed.
The great divide between generational preferences in banking is closing. A 2024 American Bankers Association Survey shows that 76% of Baby Boomers preferred online account opening over the past year. Only 13% of Boomers visited bank branches.
Meanwhile, Gen X had similar preferences, with 79% of them banking through mobile or online and 8% visiting bank branches.
Surprisingly, the banking habits of older Americans were closely aligned with those of Millennials’ and Gen Z, who also prefer digital experiences. Eighty percent of Millennials report doing mostly online and mobile banking, and only 7% visit bank branches. Gen Z generation was slightly less inclined to do their banking digitally, with 72% doing online and mobile banking and only 4% going to bank branches.
Other banking methods mentioned in the survey included visiting their ATM, making phone calls, and receiving mail.
Why Your Bank Needs Digital Account Opening Software
Traditional account opening systems require customers to visit their local financial institution and fill out paper forms. This outdated process hasn’t resonated well with today’s younger generations. And now that older generations have become more accustomed to the convenience offered by digital solutions, they’re jumping on the bandwagon.
In today’s banking world, customers of all generations want to avoid long wait times at bank branches, physical paperwork, and inconvenient identity verification processes.
As more customers choose digital banking through their smartphones and computers, many banks are realizing they don’t have the systems they need to keep up with demand. Old banking systems don’t have the automation and speed that digital account opening software provides.
They also lack built-in KYC capabilities and tools that help verify identities and meet regulatory requirements more efficiently.
It doesn’t matter which banking service a customer needs today; most want a user-friendly, fast, and secure way to do their banking. Upgrading to digital account opening software can help your bank reduce digital onboarding time and cater to today’s banking customers of all generations.
Banking Strategies to Stay Relevant and Meet Current Generational Expectations
1. Invest in Digital Account Opening Software
Digital account opening software allows customers to complete a new account application online without having to visit a bank branch. There are no paper forms and you don’t have to wait for a bank teller or account manager to be available.
Digital account opening software enhances the customer experience throughout the entire account creation process. It helps streamline onboarding, whether a customer is opening a checking, savings, or other deposit account or applying for a debit card.
It also supports small business account opening workflows, making it easier for entrepreneurs and small business owners to open accounts without needing to visit a branch.
The best digital account opening solution is a true end-to-end experience, from application and ID verification to compliance and onboarding.
It should have the following features:
- User-friendly interface
- Real-time automated document checks
- Identity verification and authentication solutions
- Functionality for E-signatures
- Built-in regulatory compliance integrations
2. Blend Digital Convenience With Human Expertise
Despite many bank customers preferring a digital account opening experience, a human connection is still important. Customers want to know that the bank staff are still there when they need them. This is especially true for older generations who still value face-to-face customer support or like to call their bank when they need help.
Your bank can stay relevant and offer the best of both worlds with a strong omnichannel approach that combines digital account opening software solutions and branch services for the best experience. It can provide fast online tools for opening new accounts and personal service when customers have important questions.
Many banks are accomplishing this by redesigning their branches to focus more on support and advice and less on routine tasks that are accomplished with digital account opening software.
3. Adopt Customer Engagement and Support Strategies Using AI
With the help of data analytics, banks are able to access more customer information than they once could. With the right digital tools, your bank can use the information to anticipate customer needs. For example, if a customer often uses a mobile app to transfer money, the bank might offer tips on budgeting through the app.
This kind of personalized engagement can help your bank build stronger relationships with its account holders across all generations.
AI tools, such as chatbots, can provide quick answers, while your call center team can step in when customers need more help or personalized guidance. By engaging customers across multiple touchpoints, your bank can increase engagement and foster long-term growth.
4. Prioritize Trust and Security
Most bank customers today are tech-savvy and won’t use digital account opening software if it isn’t secure, particularly when it comes to their finances. Customers want to feel that their information and money are safe.
Your bank can increase trust by explaining how it protects accounts to keep money safe. It’s also a good idea to implement solutions like two-step login or even biometrics like facial recognition software or fingerprints to keep accounts more secure.
5. Personalize the Onboarding Experience by Generation
Younger demographics are more likely to prefer a mobile-friendly design and a user-friendly interface during the onboarding process. They also prioritize speed and want to avoid complicated forms. Meanwhile, a Millennial customer might appreciate budgeting or savings tips more.
Gen X and Baby Boomers might need more guidance during the digital account opening process. In this case, a follow-up call or assistance through live chat would be good options to have.
The best digital account opening software makes it possible to provide tailored experiences for individual customers. By adjusting the process to fit different preferences, your bank can improve customer satisfaction and make every customer feel supported, no matter what generation they’re a part of.
6. Leverage Open Banking
Open banking allows customers to link their bank accounts with other financial tools and apps, giving them more control and a better view of their money all in one place. For example, a customer can use a budgeting app that works with their bank account to help them track spending or save for goals.
A key advantage of open banking is that your bank can offer more services without having to build a brand-new system. This is possible through the use of APIs, which allow different financial tools and platforms to securely connect and share data.
7. Collaborate With a Reputable Fintech
Partnering with a trusted fintech company can help your bank have the newest technologies without having to build a system from scratch. Many Fintechs specialize in digital tools like digital account opening software for banks.
These account opening systems typically have built-in identity checks, fraud protection, mobile banking features, and compliance tools. They also meet modern customer needs for speed and convenience.
A strong fintech partner can also help integrate new software into your bank’s core banking systems, roll out updates faster, and respond to customer needs more quickly.
Conclusion
Bank processes have changed, but these changes aren’t necessarily a bad thing. These changes offer your bank an opportunity to meet new customer needs, extend its reach, and increase its revenue.
People from all generations want easy, fast, and safe ways to handle and manage their money. From Gen Z to Baby Boomers, most customers are using their phones and computers instead of visiting branches to open new accounts, make deposits, and check their transactions.
These shifts mean that your bank should upgrade to digital account opening software to keep up and meet the needs of modern bank consumers, no matter what their age.
But customers still want the kind of support that fosters trust. It can be a nifty app that provides the answers they need or an actual person who understands their needs. By combining effective digital tools with human services, your bank can build trust, reach more people, and stay competitive.
Your bank can also reach higher success by working with reputable Fintech partners, using open banking solutions, and personalizing the experience for each generation.
FAQs About Digital Account Opening Software
1. Why are banks changing the way they open new accounts?
Bank customers of all generations want fast, easy, and safe ways to open accounts without having to go to a branch. Traditional paper forms and long wait times don’t work well anymore. Digital account opening software lets people sign up from their phone or computer in just a few steps.
2. Can digital account opening software help with other use cases, such as small business loans?
Yes, it can. Biz2X, for example, has a digital loan origination system that streamlines the loan process, improves decisioning, approves loans faster, and enhances the user experience. It can also optimize risk assessment and help your bank stay compliant with KYC and other regulations. With a faster underwriting process, your bank can approve more commercial loans without raising its risks.
3. How can banks keep a personal touch while going digital?
Even with digital services, customers still want to feel supported. Banks can offer live chat, phone support, and in-branch help for those who need it. The goal is to combine fast online tools with friendly, helpful staff when needed.
4. Is digital account opening safe and secure?
With the right system by the right provider, it’s very secure. Digital systems use tools like ID checks, two-step logins, and fraud alerts to protect accounts. Your bank can also follow strict rules to keep personal and financial information safe throughout the process.
5. How can working with a Fintech company benefit our bank?
The best Fintech companies have advanced tools and systems ready to go, like digital account opening software. At the same time, the software can often be customized to fit your bank's workflows. Partnerships with trusted Fintechs can help your bank quickly improve its services and stay current with new technology and customer needs.
Ready to meet the banking needs of all generations, from Gen Z to Baby Boomers? Biz2X’s digital account opening software can make it happen. Contact us for a demo.
