That is not unusual for banks in Florida, but for customers who wanted to open additional accounts, the geography issue was compounded by Seacoast's cumbersome online process. Some even said that opening and funding an account through Seacoast's Web site was less convenient than flying to Florida to take care of the paperwork at a branch.
To resolve this problem, Seacoast introduced in February a streamlined process that lets customers open additional accounts — often in about 30 seconds.
Matt Kennedy, the alternative banking services manager for the company's Seacoast National Bank unit, said the previous account-opening process treated existing customers as if they were new ones who had to prove their identity from afar.
"Basically, we would mail them a signature card with instructions that they would have to get their signature notarized, photocopy their identification and mail it all back to us with their opening deposit — and more than 50% of those initial inquiries we never got back," he said.
Even for the half that completed every step, the process took about two weeks, he said. Since these were existing customers, they had already jumped through all these hoops — or perhaps fewer — when they opened their initial accounts in a branch.
Kennedy felt there must be a better way and that finding it would lead to more deposits.
Seacoast has been a Metavante Technologies Inc. customer since 1998 and uses the Milwaukee vendor for core processing and online banking services. "Pretty much all of our systems come from Metavante in some way," Kennedy said.
Because Metavante already provided Seacoast's online banking, he said, it was the obvious choice for an account opening and funding overhaul.
Metavante "had the solution already integrated into the Internet banking platform, and that's really what we were looking for."
The new process has all but erased Seacoast's abandonment issue.
"There is actually zero abandonment because the account opens and funds all within those 30 seconds," Kennedy said. "They are basically doing three clicks of the mouse, and they have a new account."
Getting Feedback
Seacoast's 42 branches are all in Florida, so when customers need to visit a branch, out-of-state means out-of-luck unless they're willing to wait.
Yet some customers were willing to wait, Kennedy said.
"We have, notably, a lot of people who spend their winters with us and their summers elsewhere," he said.
"We were seeing customers who would come into our brick-and-mortar branches and say, 'Yeah, I started the process online. I never finished it. Now it's three months later, and I really do want to open a second account.' "
Seacoast has about 56,000 consumer retail customers, and about half of them bank online. The branch is still a popular destination for customers who want to open additional accounts, he said, but now opening an account online has become a much more realistic option for those who spend their summers up north.
In the first six months since Seacoast's online account opening system went live, existing customers opened 92 accounts online, up 92% from the 48 new accounts in the same period, February through July, of 2008.
Know Your Customer
The reason the system works so quickly is that the bank already has all the information it needs about its customers; the challenge was making it accessible to the right parts of the system when they are opening additional accounts.
Proving an existing customer's identity online is far easier than going through the steps necessary to verify information from new customers. For its new instant online account opening system, Seacoast said, it requires just a user name and password, the same credentials used to log in to its online banking site.
"The customer is already authenticated through the online banking login process, so we know exactly who we're dealing with and who is opening that additional account," Kennedy said.
Another perk is that the money stays in the bank, so there is no risk of Seacoast's losing immediate control of the funds.
"We do have some security concerns about opening and funding new accounts for people that don't already bank with us," he said, and Seacoast is not ready to consider expanding the system to nondeposit products, such as credit cards.
However, Seacoast has not ruled out expanding the system, and Kennedy said that Metavante also has an online account opening product designed for new customers. It may also expand this system to let existing customers open retirement accounts, he said.
Tax Time
Though Seacoast has only marketed the system through its online banking sites and its secure e-mail system, it found that the timing could not have been better — in February, people were already thinking about what to do with their tax refunds.
Kennedy theorized that those funds might have gone elsewhere had the new system not been in place.
"Around tax time we've seen a lot of people have their tax returns direct deposited into their checking account and use the solution to open up a savings or a money market account, therefore keeping the money here at the bank and perhaps keeping it in their pocket," he said.
This was not an anticipated effect of the new system, he said. "It was really something new that we experienced this year for the first time," he said.
Good Decision
Surprisingly, the introduction of the system has not driven down the volume of accounts opened in branches, though some people said they only came to the branch because they got fed up with the earlier online process.
Kennedy said that some customers are simply predisposed to opening accounts in branches regardless of what alternatives the bank offers.
As a result, he said, he thinks that many customers who abandoned Seacoast's online process also abandoned Seacoast altogether and simply opened other accounts at different banks.
"The process was just so cumbersome for them that they just gave up," he said.
Not only did Seacoast land more accounts, Kennedy said, but the new system also has freed up bank employees who would otherwise be tied up in the earlier process.
"Customer satisfaction played a big piece in it," he said, "and the time savings, not just for the customer but for our associates as well."
Broader Appeal
It is not surprising that Seacoast's new system has eliminated application abandonment, said Nicole Sturgill, the research director for delivery channels at TowerGroup Inc., a Needham, Mass., independent research firm owned by MasterCard Inc.
"Who has time to abandon a 30-second process?" she said.
Seacoast's earlier process seemed needlessly tedious, she said. Even banks that require a physical signature to open a new account have the option to take that signature off a customer's first check.
Requiring customers to get a signature card notarized is a process "that sounds to me like Audit designed the process and told IT and the line of business how they were going to do it," she said.
Under the new system, security is much less an issue. "Through your online banking authorization, they know exactly who you are," Sturgill said.
A major benefit for existing customers is that they no longer have to verify their address by receiving mailed materials, she said.
Seacoast's clients often have multiple addresses, which can confuse an automated address verification system, she said. "If the address doesn't match up perfectly, it bounces back, and the account doesn't get opened."
This can be resolved by phone or in person, but it adds needless steps and increases the odds that a customer might give up and open an account elsewhere, she said.
The appeal of this system is not unique to Seacoast and its snowbird clientele, Sturgill said. "I don't think there is a financial institution out there," she said, "that doesn't want a fast cross-sell process for online account opening."
The effect this has had at Seacoast around tax time may be hard for other banks (or even for Seacoast) to duplicate, she said.
"That's not a trend that I've heard before, that there's this deluge of new accounts in April," she said. Some tax preparers give out advance refunds on prepaid cards, which can make it harder for banks to harness that money, since people may be more inclined to spend it directly from the card, she said.
Overall, she said, Seacoast has made an excellent use of technology to replace what was once a needlessly labor-intensive process.
"They are fully integrated," she said. "You don't need human intervention to get this account open and get it done."
