The adoption of mobile and online banking increased significantly as a result of the pandemic, and there is no indication that use of digital channels will subside in the future. For banks and credit unions, digital engagement provides an opportunity to lower costs, while giving consumers a seamless way to do everyday banking any way they want 24/7/365.
More importantly, digital banking provides the opportunity to engage with a consumer instantly, with suggestions on how to make their lives more financially secure, using both primary and secondary data and insights.
Few organizations have had the digital transformation success that has been achieved by Bank of America. In the past few years, Bank of America has invested billions of dollars to grow its digital platforms. The investments are reaping significant rewards.
With over 54 million digital banking users at Bank of America, here are nine digital banking trends that everyone in the banking industry :
- BofA added 2 million active digital clients in 2021.
- BofA’s digital logins increased 15% YoY in 2021, up to 10.5 billion. That’s over 28 million every day.
- 24 million users of BofA’s Erica chatbot completed 123 million interactions in Q4 2021, up 247% YoY.
- 86% of BofA’s deposits are made through digital or ATM channels.
- 16 million BofA customers are active users of Zelle.
- 70% of overall households banking with BofA actively use digital platforms.
- 49% of all sales at BofA are now digital, up 46% YoY. BofA now conducts 1.5 million digital sales annually.
- BofA booked 764,000 appointments digitally in 2021, up 20% YoY.
- More than 6 million BofA customers have created a Bank of America Life Plan, a PFM goal-setting tool for mobile devices.
Digital Activity Results in Higher Customer Engagement
At a time when financial institutions are looking for higher levels of engagement, digital use is a foundation for success. According to research by PYMNTS, mobile app users access their accounts slightly more frequently than website users. The research found that 47% of consumers bank and transact via their mobile app at least once per week, with 12% doing so daily. Among consumers who perform these activities on a bank’s website, 46% do so at least once per week and 10% do so every day. Both represent far more frequent engagement than branch-based customers.
While there is little doubt that Bank of America has a scale advantage for their digital technology investments and for digital product innovation, that doesn’t mean they can rest on their laurels, or that smaller organizations can’t compete. But in a digital world, where change is happening faster than ever, speed of competitive response is imperative.
The insights being collected on how consumers interact with conversational AI, such as Bank of America’s Erica is invaluable. As usage of Erica went from 17 million users to 24 million users in the past year, and interactions jumped from 30 million to 120 million during the same period, expansion of functionality and capabilities creates an exponential growth in both insights and customer ‘stickiness’. More than just answering customer questions, Erica now uses natural language processing to understand queries and work proactively to help customers.
The competitive power of Bank of America’s digital Life Plan portal is also hard to duplicate as consumers are increasingly looking to become more financially secure across different stages of their lives. The ability to create and deliver customizable advice based on financial goals, transactional activity and insights from outside Bank of America creates a loyalty level that goes far beyond transactional banking.
“Financial services is going through a massive transformation. We know that building lifelong relationships is what really helps them achieve financial goals.”
— David Tyrie, Bank of America
Digital engagement has become an increasingly important metric with banks and credit unions as the fragmentation of financial relationships has escalated. By better understanding how and why a customer engages with their financial institution, it can help retain primary banking relationships. Deeper engagement equates to more time being spent on using their primary banks’ products and services as opposed to an alternative provider.
( Learn More: Consumers Demand Improved Digital Banking Customer Engagement )
Drive for Improved Customer Experiences Never Ending
Banks and credit unions that commit to inside-out digital banking transformation can spend less money on product delivery, back office infrastructure, and customer acquisition/onboarding. Reimagining legacy processes and automating for digital delivery allows banks to reduce operating costs, hire fewer people, and improve the speed and ease of customer engagement.
These objectives don’t need to be achieved alone. Third-party providers can offer the benefits of speed and scale of innovation, leveraging insights from other clients served. Financial institutions of all sizes are increasingly replicating the digital capabilities of fintech through partnerships and acquisitions.
But customer engagement isn’t optimized if listening tools aren’t in place, At Bank of America, this process involves consolidating 50 million data points across branches, phone, and digital apps, incorporating text analytics tools to group feedback into themes, then routing these insights to Bank of America employees.
According to Holly O’Neill, president of retail banking at Bank of America, and a guest on the Banking Transformed podcast, the foundation of great customer experiences includes 1. listening to customers across all platforms and using all sources of insight, 2. balancing the use of digital with the enhancement potential of humans, and 3. investing in soft skills that help the entire organization to lead with empathy.
A Move to a Single, Integrated Digital Platform
With digital engagement being the centerpiece of building relationships with customers, the future of banking at Bank of America will be a ‘universal app’ that can connect a customer to all of their financial services. According to American Banker, Bank of America will roll all of its product lines into a single app in December 2022.
The bank’s new app will integrate retail banking, investing, and mortgage services, providing a single location for all of all financial needs. It is theorized that bringing all its products and services into a single platform will simplify use for customers and increase cross-sell opportunities, resulting in overall engagement growth. This move comes at a time when more and more digital-first organizations are creating ‘super apps’.