Bank of America: Digital Adoption Has Reached 83% of Customer Households

Bank of America

Bank of America’s latest results show an increasing adoption of digital channels by customers to get their banking done.

The presentation materials from the company show that during the period, the bank added 157,000 net new checking accounts. The firm also added 1.2 million credit card accounts — and drilling down into the details, digital sales grew 8% year on year to represent 51% of total sales. That tally was up from 48% a year ago.

Digital households as a percentage of customer relationships, the company said, touched 83% of the bank’s relationships, up from 77% in the same period of 2020.

Interactions with Erica, BofA’s virtual assistant, numbered 2.7 million, up from 1.9 million in the year ago period. CashPro App sign-ins numbered 803,000, surging from 508,000 last year, with more than $200 million in payments volume, vs. $167 million in 2022’s second quarter.

Bank of America’s data also showed some of the same volatility that had been seen with other recent bank earnings (such as JPMorgan and Citigroup). In BofA’s case, non-checking deposits were $490 billion in the latest period, down 2% from the first quarter though up 30% from the end of 2019, before the pandemic set in.

The combined credit and debit card spend was up 3% year on year to $226 billion, as credit gained 1% and debit was up 3%. The consumer credit card net charge off ratio was 2.6% in the most recent quarter, gaining from 1.6% a year ago.

Consumers Are Still ‘Healthy’

“Our results this quarter once again include solid performance on things we control by delivering organic growth and operating leverage. We did that in an economy that remains healthy and had a slowing rate of growth,” CEO Brian Moynihan said on the conference call with analysts. And in discussing digital interactions, he said the online offerings “produce a great customer experience, resulting in strong customer retention.” Erica, he noted, “was an early application of natural language processing and artificial intelligence that we built in our company.”

Zelle logged positive growth as the number of people using Zelle grew 19% this past year, Moynihan added. In the quarter, users topped 20 million, up from 17 million last year, with $91 billion in quarterly volume topping the $73 billion in last year’s second quarter.

CFO Alastair Borthwick said charge-offs are trending toward pre-pandemic levels and are still below historical levels, adding that “the credit card growth reflects increased marketing, enhanced offers and higher levels of accounts openings over time.” The “consumers still in a pretty healthy place,” he added later in the call.