A decade of investments in digital technology paid off this year for consumer banks as customers navigated the coronavirus pandemic by embracing mobile and online banking. SmartBrief caught up with Christine Channels, who is Head of Community Banking and Client Protection at Bank of America, to hear her insights on why digital banking is here to stay. Channels, who is the newly appointed chair of the board at the Consumer Bankers Association, also talks about the stability of the industry and how banking is set to evolve.
The pandemic sparked massive changes in the industry. Which were the most significant and which were the most surprising?
Most banks experienced increased user engagement in mobile and online banking during Q2 of this year. More than just using the app to check their balances, we saw an increase in the number of activities and features clients are now doing. Customers are using the app to pay their bills, send money to their family members and setting up accounts. For example, the use of Zelle – a fast, free and easy way for clients to send and receive money – continued to grow in Q2, up 70% year-over-year. We saw our clients use mobile check deposit more than 41 million times in the second quarter, a 7% year over year increase, representing 37% of all deposits in Q2. We also saw increased digital adoption among baby boomers and seniors. For example, in the month of April alone, baby boomers and seniors accounted for 23% of first-time digital logins and 22% of new mobile deposit users.
Our digital engagement with small business clients is significantly outpacing consumer banking with digital sales up 200% year over year. In just the first 45 days of the PPP loan process, we originated a loan balance scale that normally would have taken 18 years.
Which pandemic-induced shifts in consumer banking are here to stay?
With the shift in clients using mobile and online banking more often, we may not go back to the volume of transactions made in financial centers, but shift in more consumers making appointments to meet virtually or at a financial center, also going online, and using AI (Erica) and chat for client care reasons. In Q2 2020, Bank of America clients booked 665,000 financial center appointments with specialists through digital channels – starting the journey digitally, leading to an in-person interaction.
Digital capabilities are only going to get better and more impactful for small business owners. The industry will need to continue to innovate around small business sales, accounting and management platforms.
In light of the pandemic and evolving banking norms, how can banks continue to support consumers and small businesses?
Listening to clients and truly understanding their needs will drive innovation and product development, so staying connected to our consumers and small business owners is a key component. We hear input all the time from clients and entrepreneurs on what’s working and what isn’t, and we use that to help shape our offerings and give them the tools necessary to achieve business and life goals.
What are the top agenda items for 2021 for the CBA Board?
In each report issued by regulators this year, the banking industry has been a source of economic strength during this pandemic. CBA’s members are committed to carrying this stability into the new year and are dedicated to leading the recovery while continuing to serve our customers, small businesses and the banking industry as a whole. Promoting sound policies, advocating for balanced consumer protections across financial institutions and preparing the next generation of bankers has been the core of CBA’s mission and will remain top priorities into the new year along with our commitment to equality and diversity.
Are there any particular policy issues that will receive increased attention in 2021?
The core work of CBA will remain the same. As an association, we will continue fighting for sound policy which fosters innovation and allows banks to continue meeting the evolving needs of our customers. Regulatory efforts to modernize CRA will certainly be one issue of focus as well as the industry’s continued commitment to racial and gender equality.
How will technology drive new trends in banking in 2021?
For the past decade our industry has been investing in digital platforms to make it easier for our customers to bank. Digital is the key to enable and support customer choice, so they can bank however, wherever and whenever they need.