A response to industry disruption does not come close to describing how quickly the banking industry has embraced digital banking. Over the past two years, the pandemic forced many institutions to adopt digital tools at an incredibly fast rate to keep up with quickly changing customer expectations. But even as the panic from the pandemic dies down, the digital acceleration has continued.
Today, the average banking customer wants their bank to offer digital tools that simplify all of their banking experiences. Digital has become much more personal and self-service solutions are more accepted. “Our clients want us to offer personalized digital banking tools and information that can help them be better informed about their finances,” said Aaron Ryan, San Diego region manager at JPMorgan Chase.
And the ease of getting that information seems to be key as banking through mobile devices has become the highest growth area as customers discover the convenience of using their smart phone or tablet.
For Wells Fargo, the second quarter of 2021 saw an increase of 7% from the previous year reaching 1.5 billion logins. Mobile deposit dollar volume was up 108% compared to just a year ago.
“We now have more active mobile customers than online active customers. Of the 32.6 million digital active customers, 26.8 million are mobile active customers, and we continue to invest in our mobile capabilities – including the ability to open accounts through mobile,” said Joseph Mishriki, region bank president of Wells Fargo for the San Diego market.
Digital and virtual investment has become a necessity in the industry as banks continually enhance their digital offerings and are supporting customers using digital and virtual channels. They have made ease of use a priority. And virtual banking is gaining significant momentum as customers have moved beyond simply wanting digital information to experiencing a traditional banking experience on their smart phone or tablet.
“Virtual banking is an initiative designed to help customers have an in-branch experience while at home. It’s a way for customers to build a relationship with a knowledgeable banker and ask those real-life questions that can’t be answered online. We are working to ensure a fully integrated, consistent and seamless experience across all our channels,” Ryan of JPMorgan Chase said.
Bank of America has also experienced an outstanding year for digital engagement. The company had double digit growth across their various platforms over the prior quarter. Today, 85% of all BofA deposits are made outside the four walls of a branch.
“More than 4.4 million clients have engaged with Life Plan, our digital offering within our mobile and online banking platforms that allow clients to set and track short and long term financial goals,” said Rick Bregman, president of Bank of America San Diego.
Access to Solutions
Now more than ever, consumers seek access to solutions that help them manage and gain even greater transparency into their finances.
According to Alan Prohaska, PNC Bank regional president and head of corporate banking for San Diego, “The focus on greater transparency is particularly apparent in the growing need to help customers avoid the potential for overdraft fees. Some studies estimate that U.S. consumers pay up to $17 billion, even more, in overdraft fees each year,” he said.
This has led to PNC launching digital offerings that help customers avoid these fees. They and other banks are seeing payment control as a “tremendous differentiator from other existing banking tools.” The bank offers a digital offering that helps customers control and manage through low-cash moments or mis-timed payments. It gives them the power to prioritize payments, according to PNC.
So being able to view one’s account anywhere at anytime has been a boost to customer confidence and their feeling of account control. Digital products assure customers that they can always access their bank accounts.
“Our ongoing commitment to continually improve and expand our digital offerings ensured we had the products and services our clients needed when the pandemic hit. A robust suite of digital tools for business clients, and online account opening capabilities have been key to offering uninterrupted service so our clients can continue to bank when and how it works for them,” said Steve Espino, senior vice president and Southern California division director at Banner Bank.
Mobile banking has also grown significantly at Banner Bank. Last year mobile banking users grew 12% over 2019.
“As basic transactions like check deposits shift to the digital space, it frees up our bankers to assist clients with more complex transactions as well as offering financial advice, which national studies show continues to be in high demand,” Espino said.
Although many banking leaders believe there will always be a need for physical facilities, the numbers of locations will be consolidating as more and more traditional banking transactions go digital.
“Branch consolidation will continue to occur as a result of continued acceptance of digital banking tools including mobile and online banking applications. The need to visit your bank for daily transactions will continue to decrease resulting in consolidation of smaller less effective branches. However banks may continue to invest in dense markets from an infrastructure standpoint to maintain a presence and personal interaction with key customers or to offer new products,” said A.J. Moyer, president and CEO of C3 Bank.
The traditional daily banking needs of both individuals and businesses are moving toward digital as consumers accept digital as the new standard in banking. This frees up bank branches to focus on their customers’ more advanced financial questions.
“More people are moving to digital channels for their day-to-day financial needs, while preferring to visit a financial center for more complex financial needs,” added Bregman of BofA.
But digital enhancements are not limited to mobile devices away from the bank itself. Bank branches are continuing to adapt more digital offerings within the physical bank as well.
“New branch investments play a critical role in serving our customers and communities and new layouts and features are aimed at changing the way we use them – more consultation and deeper conversations with enhanced use of appointments, flexible space for do-it-together activities as well as education on mobile and digital tools,” said Ammar Abuyousef, U.S. Bank’s consumer & business banking San Diego leader.
The pandemic showed many in the industry just what their customers actually want and need when it comes to digital banking. Whether it is improved ATMs, more tools for online or mobile banking, or live chat and increased virtual offerings, the banking industry has been gathering data and moving in the direction their customers want most.
“Recent enhancements, including digital wallets, contactless credit cards, and digital document signing have proven invaluable over the past 18 months,” said Espino of Banner Bank.
The increased consumer demand for digital banking services at every level has given rise to more and more advancements. Almost every bank has come out with their own technology-based tools to make banking easier.
“When combined, all the tools make banking more efficient, providing a time savings to customers,” Moyer of C3 said.
According to JPMorgan Chase’s Business Leaders Outlook survey released earlier this year, 56% of midsize businesses have increased their usage of online banking and treasury tools.