The combined effects of changing consumer behavior, a volatile external environment, and government regulations are taking a toll on how traditional demand deposit accounts (DDAs) are being originated. Traditionally, consumers could quickly and easily be approved for DDAs, but the bar has been raised on approvals. In the past, these kinds of accounts experienced high attrition rates and low consumer loyalty so they were not a focus for realizing profit. Now, however, FIs have started to realize that great returns can come from these kinds of accounts, both directly and indirectly. To improve account origination processes, there are software solutions that can increase customer loyalty and decrease attrition rates through more rigorous decisioning processes, better customer service, increased availability of information, and more end user flexibility for FIs.
More rigorous decisioning processes can improve DDA openings by using alternative data in analyzing the account worthiness of consumers. Alternative data can include information such as rent and utility payments, accounts closed for fraud, KYC, OFAC, check cashing history, and payday lenders. This improves the account opening process because it helps banks get a more holistic view of consumers because they are seeing their fiscal responsibility through various facets, not just the information provided by credit bureaus.
