Here's How Bank of America Is Betting on Digital
Brought to you by WBR Insights
Digital transformation is still a major buzzword in global industry. And, while it's certainly making waves in almost every corner of business, the banking sector is arguably where it's rocking more boats than anywhere else.
News continues to reach us of the widespread closing of physical bank branches. Retail bank closures totaled 1,947 branches in 2018, up from 1,919 in 2017. Some banking brands are bucking this trend, such as JP Morgan Chase which is investing in new physical branches alongside its digital transformation. However, those brands which are taking this road tend to be focusing on placing fewer branches in optimal locations - getting the most possible coverage for each one.
One brand which is going big on digital is Bank of America, and it has some interesting thoughts and innovations to bring to the table in this regard.
Bank of America
In a recent interview with CNBC, Bank of America CEO, Brian Moynihan discussed how the brand was turning its attention to millennial and generation Z customers with a refreshed and revitalized digital banking strategy.
"Technology has transformed the way that most industries operate, and the financial industry is particularly feeling the heat with the growing popularity of digital peer-to-peer payment services," said Moynihan. "Mobile banking, with the rise of app-based financial technology services such as PayPal's Venmo and Square Inc.'s Square Cash, has forced traditional banks to adapt in the past decade."
According to Moynihan, Bank of America has around 16 million customers who fall into the millennial age bracket (approximately between 25 and 38) who have a combined worth of $200 billion in deposits, investments, and loans with the bank. Actual figures are scant, but GenZ would obviously add another massive chunk of business on top of that.
As a likely result of the volume of digitally-savvy customers now doing business with the bank, the numbers are rising when it comes to using technology to access banking services. In 2018, mobile banking at Bank of America rose by ten percent, and digital sales made up 25 percent of all consumer banking sales - showing a clear trend and desire for these kinds of services.
Bank of America presently has about 37 million digital customers and 28 million mobile customers, and it's not afraid to refer to itself as a technology company that just happens to be good at banking.
"It's absolutely a fair statement," said Moynihan. "The numbers are just rolling."
Digital Debit Card
As part of this drive to court the younger generations through increased technology-based services, Bank of America recently announced it was launching a new digital debit card that would be made available to all its smartphone-using customers.
"Bank of America today announced the launch of a digital debit card and other enhancements to its award-winning mobile banking app designed to make it easier and more convenient for clients to manage their finances on the go," said the company in a press release. "These latest enhancements further advance the company's high-tech and high-touch approach to helping clients meet their financial goals."
The digital debit card will be featured within the bank's existing mobile app and allow customers to pay for a range of goods and services whether they're in a store, purchasing products online, or using a mobile wallet such as Apple Pay or Google Pay.
The idea behind the card is that it will allow Bank of America customers to start using a new card immediately, whether they have just opened an account or are waiting for a replacement card because of fraud or loss. All they have to do is open the app and the new card will be there waiting for them. The digital debit card is also ideal for those times when a customer doesn't want to take their purse or wallet out with them - such as on a night out on the town for example.
The digital debit card can also be used to withdraw cash or make deposits at any one of Bank of America's 16,000 digitally enhanced ATMs, and touts having the same level of security, protection, and benefits as the traditional physical card.
"Our goal is to bring never-before-possible convenience to clients," said Head of Advanced Solutions and Digital Banking at Bank of America, David Tyrie. "With our new digital debit card, clients can transact immediately and avoid waiting for their permanent card. This feature is one of several new digital offerings that reinforce our commitment to making clients' financial lives easier."
Final Thoughts
Bank of America has also recently announced a mobile ordering system that will allow customers to place orders for things such as foreign currency through their smartphones and track the order's progress. This and more are demonstrating why Bank of America is one to watch when it comes to digital banking.