The drive for revenue and the desire to improve the customer experience are converging within financial services, with one of the results being a renewed interest in new customer onboarding. On the revenue side, the importance of onboarding is clearer. A new customer who leaves after opening a new account is an expensive proposition. For something like deposit accounts, that attrition rate is somewhere between 25% to 30% of new customers, and when you add up the cost to acquire the account, the cost to open the account, and the potential loss of ongoing revenue, the impact can be huge to a financial services firm.

On the customer experience side, a new revelation has surfaced. Onboarding is to financial services what out-of-box is to companies like Apple computer. Apple sweats the details around the experience of getting, opening, and engaging with their devices. Financial service companies do little in that way, but that is changing with a renewed desire to improve the customer experience. That is where onboarding comes in. Onboarding is the out-of-box experience for financial service product. It is the processes and experience new customers have as they activate and utilize a new product.

We are very excited to announce the hiring of our newest analyst in the eBusiness and Channel Strategy team – Tiffani Montez.

Tiffani joins Forrester from Wells Fargo where she spent 20 years managing various aspects of digital strategy, implementation, operations and cross-channel integration across lending, investments and customer service.  Tiffani joins a quickly expanding team which includes Peter Wannemacher, Bill Doyle, Ellen Carney and myself in North America dedicated to eBusiness and channel strategy for retail banking, lending, investments and insurance.

Tiffani’s will focus on digital financial service technologies including areas like mobile banking, personal financial management, online banking, person-to-person payments, automated account opening, etc. Tiffani will explore the vendor landscapes for these and other areas to help clients understand about how to make strategic vendor choices, implement new technologies, and create a operational team to manage the solutions once installed.

Additionally, Tiffani will expand on Forrester expertise in the lending area as well as cross-channel integration to drive sales and service strategies.

Tiffani can be found on twitter at @tiffanimontez

Brad

No topic has straddled the chasm of hype versus ROI as social media. The last few years have been a never-ending array of stories around successes using social media as well as pundits questing the validity and value of the social area. The financial services industry is increasingly playing a role in the social space, and the last two years have also provided clarity to the value of the social channel.

Like other industries, the majority of the efforts in the social space in financial services space were initially focused on the marketing area. The last two years have resulted at least four areas that show promise for social outside of pure marketing including:

• Product development and innovation. Who better to ask about new product development or product enhancements than existing customers who own and use the product? Firms such as Chase tap social communities to drive product innovation that starts with the customer are using social very effectively

• Community support. While financial decisions may be a personal activity, the path to these decisions is often steeped in social with segments like investors or small business looking to one another for peer comparisons and best practice sharing. American Express, TradeKing, and most recently E*Trade are using closed communities to drive service utilization and segment engagement by getting customer to interact with each other in the social space.

In our new report, "The ROI Of Mobile Banking," Forrester presents a flexible model to help eBusiness and channel strategy executives estimate the ROI of — and outline the business case for — their mobile banking strategies. The resulting return on investment comes to roughly 15%. While positive, the ROI from our model is far from a ringing endorsement of mobile as a money maker for banks today.

For the report, we use our model to estimate the ROI of a multifaceted mobile banking effort by a US-based retail banking provider with 500,000 deposit account customers. Forrester’s model includes eight modifiable inputs: four cost inputs and four benefit inputs. These cover the cost of developing, testing, and implementing mobile services, as well as the potential savings and revenue that a provider might expect from offering such services.

Our findings do not mean mobile banking initiatives should be scrapped. Far from it: Supporting the mobile channel is no longer optional for banking providers in most markets. Their customers and prospects — especially the younger set of Gen Xers, Gen Yers, and teen Millennials — will demand it. Forrester’s Technographics® research shows that 22% of US online adults say it is either “important” or “very important” that the deposit account provider they choose offer access to their accounts through a mobile phone or device. And more than a third of adults younger than 35 feel this way.

Google recently released a savings account comparison tool to go along with a similar tool launched last year for mortgages. 

In a June 2010 report, eBusiness Leaders: It's Time To Take Financial Service Comparison Web Sites Seriously, we showed that 26% of comparison site users were drawn to comparison tools because of advertisements and 22% came via an Internet search. The launch of Google’s savings account comparison tool will only increase the exposure of comparison tools and sites in the US and other markets (the tool became available in the UK in 2010), mostly because of its strong tie to the buying process and prowess as a search engine. 

Google’s comparison tool covers other retail banking products as well as mortgages, credit cards and checking accounts. The focus on personal finances instead of solely investment products — which for some US companies is a missed opportunity — increases the pressure on smaller firms like Bankrate.com or CreditCards.com, since it aggregates information for all key retail banking products and will likely benefit from greater exposure by virtue of being associated with Google.

The only major downside of Google’s tool is the lack of major players in the space like big traditional banks. This will be more an issue for less rate driven products like checking, where choice is based on factorsother than just interest rate.