Bank of America recently announced that they had enrolled over 10 million unique mobile banking customers. While this represents approximately 40% of the 25 million online banking customers which the bank boast, you might be inclined to dismiss, or at least diminish this milestone, but doing so misses the broader point.
Mobile banking adoption is not just about racking up big numbers, it’s about achieving the benefits that the initial business case and mobile strategy were built upon. Three years ago, when we first spoke to Bank of America about mobile banking, they talked about many of the same components that you often hear in a mobile banking strategy. Improving customer loyalty, increasing acquisition rates and providing additional opportunities to cross-sell the bank’s products are no doubt compelling arguments for investing in mobile, but when it came to building a business case and actually justifying the investment, it ultimately came down to cost savings. The team at Bank of America argued that by investing in mobile technology, they would be able to increase customer self-servicing and decrease the need for traditional spend – call center, ATMs and branch locations in particular.
Fast forward to last week, when two stories – which when considered together – begin to show the benefits realization that Bank of America is seeing as a result of their mobile banking efforts. First, Bloomberg reports that the bank has scaled back its ATM network by 9 percent in 2012, while also shuttering 108 branches just this year. This article coincided with Bank of American beginning the launch of Mobile Check Deposit last week, and continuing across their application portfolio over the coming weeks. The mobile deposit capability is key to Bank of America’s customer self-service strategy, and as forecasted in the mobile banking business case, is part of the mobile vision of reducing the need for both ATM and branch visits. While there are likely a combination of factors that led to last week’s reported reduction in ATMs and branches, there is no denying that mobile banking is a key enabler of CEO Brian Moynihan’s Project New BAC, which strives to cut the expense associated with servicing unprofitable retail customers.
Congratulations to the mobile banking team at Bank of America, as they can finally begin pointing to hard benefits derived from all of their efforts. Based on the current and planned direction at the bank, I am confident that this is only the beginning.
UPDATE: 8/1 – Bank of American mobile adoption numbers updated to reflect a more recent report.
