Answer: You can, but it’s extremely hard at the 30 largest retail banking institutions. Note that the question was NOT “Can you open an online bank account online?” As that answer would obviously be YES.

From Credit Union Times:

According to a study of nearly 1,400 people who successfully applied for checking accounts at the nation’s 30 largest retail financial institutions, only 8% of successful applicants were able to complete the entire process from start to finish on their smartphones or tablets — a full 67% had to finish the process in another channel, such as going into a branch.

Regarding millennials, it appears that banks are happy to steer them to their branch system:

Young millennials are often forced into branches, the study noted. Younger ones were significantly more likely to end up finishing their applications in a branch (62%); that rate was just 38% and 32% for older millennials and GenXers, respectively.

“One likely reason is that many FIs steer young millennials to branches because these applicants commonly have ‘thin’ credit files and it is more difficult to confirm their identities,” Javelin reported. The push to branches may also give financial institutions a chance to offer more guidance, it added. Making it easier to research and compare products in digital channels, and guiding young applicants to appropriate products can counter this, it noted.

I think Javelin is missing one of the primary reasons they want to steer them into the branches: cross-selling and to get them to say “yes” to overdraft protection. For more on cross-selling, go here and here.

In my mind, this creates a great business opportunity for a bank to exploit. When you consider all the financial services that you can sign up for online, such as brokerage accounts, credit cards and mortgages, it seems anachronistic that the simple savings/checking account requires a face-to-face encounter. Online banks have been handling this application process online for years. One of the big players will take the lead on simplifying the application process and the others will follow. My prediction (and I don’t make many): In 10 years, over 80% of new accounts will be set-up online. Someone remind me to check out that claim in a decade.

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Here’s a great role play activity to help students prepare for that visit to the bank to open their first account. We have to demystify the banking experience for newbies and this is a great way to do it.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.