Earnings season is less than a week old.
But with some of the largest names in the industry having already reported, the digital shift and mobile banking remain trends. In many cases the rate of growth is slowing, indicating some critical mass as consumers continue to use online channels to conduct at least some aspects of daily financial life.
Management noted on conference calls for some of these “big banks” — JPMorgan, Citigroup and Wells Fargo — that the branch experience itself is changing, and is being reinvented to fit more fully into an omnichannel effort to meet consumers where want to be met.
As JPMorgan Chase reported Friday, the company’s active mobile customers were up 9% year on year, to 53.2 million. The number of active digital customers, overall, was up 8% through the same timeframe to 66.8 million. At the same time, the branch count was flat quarter over quarter and up 1% to a bit more than 4,800.
During the conference call with analysts, CFO Jeremy Barnum was asked about the company’s “record tech spend,” where JPMorgan has in the past committed to shelling out billions of dollars annually to upgrade systems and enhance security.
Barnum said, “The growth in digitally engaged consumers is higher than the overall growth in consumer accounts, meaning that we’re continuing to increase the percentage of our consumers that are digitally engaged.”
And he said that the digital enhancements represent a “multichannel, fully engaged customer strategy, which requires a lot of investment in branches, obviously, but also in digital services of all sorts.” Younger generations, he said, have “different expectations and we have to be nimble, and we have to be on our ‘front foot.’ Otherwise we risk getting severely disrupted.”
CEO Jamie Dimon noted elsewhere on the call that the competition for JPMorgan across digital fronts and in the branches includes Wells Fargo, “which was coming back,” and he called out Marcus and Chime among others, including Stripe in payments.
Wells Fargo, for its part, said in its own earnings materials that its digital (online and mobile) active customers were up nearly 3% to 34.6 million, while its branch count has declined by a bit more than 5% to 4,355.
CFO Michael P. Santomassimo said on the call that the company is in the midst of “making investments in refurbishing branches across our existing network. Additionally, we are bringing our digital onboarding experience to our branches, creating a fast and easy experience for our customers.”
LifeSync, available through the company’s mobile app, was singled out by management as an example of a money management tool available to wealth and investment management clients — facilitating banker-client “needs-based conversations.”
Citigroup’s technology spend across the firm was $3 billion in the quarter, up 8% year over year and, as noted by Mark Mason, CFO “largely driven by investments in product development, platform enhancements, and improving the client experience.” Financial supplementals show that active digital users were up 6% to 26 million.
The bank earnings and commentary dovetail with PYMNTS research that has found a cross-section of banking clients — including small business customers — prefer using digital channels. In some cases, a hybrid approach is favored, as this study indicated, where 55% of consumers surveyed said that the personal touch — and at least some in-branch interactions — matter and go a long way toward setting loyalty to certain providers.
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