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Q4 Earnings Reports Show Mobile Banking’s Surge

Published: (Updated: ) in FINTECH by .

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One common theme amid bank earnings — beyond lofty trading revenues gleaned from Wall Street — has been the increased uptake of mobile banking. Stats from banks, pretty much across the board, have given evidence that consumers have been pivoting to their mobile devices to attend to their everyday financial needs.

In just a few recent examples:

Bank of America said this past week that  active mobile banking users rose 6 percent to 30.8 million during the quarter. Active digital banking users likewise grew 3 percent to 39.3 million. In terms of customers going online to bank, BofA added that digital sales accounted for 45 percent of all consumer banking sales for the quarter. Consumers using the Zelle payments network (which BofA partly owns) sent and received 157 million transfers worth $43 billion overall.

As CEO Brian Moynihan said on the earnings call to discuss results: “The physical payments of cash and checks have moved to more digital forms which create operational efficiencies for us and has been a strategic initiative for many years, and one that was moved forward by the [coronavirus] crisis.”

Earlier in the month, J.P. Morgan Chase said in its own results that the branch footprint shrank 1 percent to a net 4,908 across the firm. CFO Jennifer Piepszak stated that 69 percent of the bank’s customers are “digitally active” where as many as 80 percent of check deposits in the quarter were done via QuickDeposit. In the home lending segment, the company saw two-thirds of applications done digitally. Overall, the company saw 10 percent growth in its active mobile customer base to 40.9 million individuals. Total active digital customers, according to materials, were up 5 percent to 55.3 million.

Citigroup said that per its latest results, mobile users of Citi banking services are up 95 percent year on year. Citibank can now open accounts online in 50 countries and in the year 2020 it opened 14 million  accounts digitally — a 200 percent increase over 2019.

The trend is so widespread in nature that digital banking has proven more popular than ever, with 89 percent of American bank customers using mobile banking apps to manage their accounts. Drilling down a bit, 94 percent of these mobile banking users leverage online banking services at least once a month, as noted in a recent Digital-First Banking Tracker.

If one draws a straight line through all of these banks’ results, the trend is up and to the right. But we note the trend is not confined solely to traditional, larger financial institutions. As PYMNTS coverage has shown, credit unions have also been showing the fruits of their digitally-focused labors. In this space, as echoed by the big banks, the pandemic has proven a tailwind.

In one example, New York-based Ocean Financial Federal Credit Union recently noted that it saw mobile check deposits triple from $565,000 in March to $1.3 million in July. The tailwind has been banking at home, in a bid to avoid risk of contagion from the coronavirus. Separately, Texas Trust Credit Union turned to a “Game of Thrones”-inspired loan offering in an effort to appeal to younger demographics. The CU said the game helped it originate 25 percent more loans through its digital and mobile channels in one month than it did over the course of the same month during the previous year, PYMNTS reported.

Of course, digital-only banks and FinTechs have been taking their place, competitively, against the traditional roster of brick-and-mortar firms. A recent PYMNTS ranking of digital banking apps found Chime at the number one spot, Nubank with the second-place ranking and Dave at number three.

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About: The January 2021, Retail Banking Services’ Paradigm Shift Report, PYMNTS examines how consumers choose to engage with their FIs when accessing information about various products and services, especially since the pandemic’s onset.

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