Banks could eliminate delays when setting customers up with online or mobile banking accounts if they could better verify their personal information during the sign-up process, according to new research from Experian Data Quality.
Online or mobile access to accounts can be held up if an application is missing a letter in the customer's name or a digit in a phone number and typically can't be granted until the discrepancies are fixed. Some banks' systems are even set up to reject applications with incorrect or incomplete data, forcing customers to re-start the process.
"You don't want to leave good applications on the floor simply because they may have failed one or two rules," says Keir Breitenfeld, a vice president at Experian Decision Analytics.
In its report, Experian found that while 70% of the nation's 100 largest banks take online applications to open accounts, few verify customers' personal data during the process. It also said that banks could easily fix errors during the application process by using available technology.
Testing the banks in mystery shopper fashion, Experian found that only 4% of banks' systems prompted for a suite or apartment number once this information was intentionally omitted, while only 11% checked to see if a phone number was valid. And though 90% validated email addresses to ensure that the "@" symbol was present, only 63% of those banks' systems checked to see if those email addresses even existed.
The results of the research come at a time when more and more Americans are trying to open accounts online or via mobile devices. Javelin reported in July that 88.5 million Americans tried to open accounts digitally in the 12 months prior.
Breitenfeld says that roughly 20% of online applications are getting hung up because of incomplete or incorrect data.
The three major credit bureaus, Experian, Equifax, and TransUnion, all have services that verify customer inputs against their consumer credit databases. For customers with thin credit files, LexisNexis, IDology, and Andera offer services that match customer entries against alternative data sources such as rent records. Verizon and AT&T have recently rolled out data verification and authentication services that check data customers enter against the phone companies' customer records.
"If you can cure a lot of that stuff up front, you've got better verification," says Breitenfeld. "You're not wrongly failing somebody just because they gave you the wrong information."