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Here’s what execs at Bank of America and JPMorgan are thinking about the future of brick-and-mortar branches as digital banking adoption soars


Brian Moynihan, the chief executive of Bank of America.

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Top executives at the two biggest US banks by assets have seen digital adoption soar among their retail customers during the coronavirus pandemic. And that’s putting a spotlight on how exactly they’re thinking about their sprawling networks of physical branches.

Speaking at the Barclays Global Financial Services Conference on Tuesday, Brian Moynihan, Bank of America’s CEO; and Jennifer Piepszak, JPMorgan’s CFO, both made mentions of the increasing reliance on digital banking tools.

There were signs in their remarks that the digital-adoption surge could change the calculus for how the two firms think about their retail footprint. JPMorgan Chase operates about 5,000 physical branches across the US, and Bank of America has roughly 4,300.

Digital banking tools are unlikely to upend brick-and-mortar branch networks of that scale — but they could potentially impact them over the long term.

Read more: Citi’s CFO says the bank is shrinking its office footprint and moving people to lower-cost locations to help keep expenses in check

“Paperless is moving to an all-time high,” said Moynihan. He noted that as many as a fifth of first-time users for mobile check deposit were boomers and seniors, showing how digital tools are now penetrating groups of users who previously hadn’t been as engaged. 

On the whole, the pandemic “probably accelerated a year or two what would have happened naturally” in terms of the migration to more digital-heavy banking habits, he said.

That’s not surprising, as the pandemic has been a big catalyst for the adoption of everything from grocery delivery to digital banking. 

One example of just how drastically customers’ behavior have evolved as habits have changed is the use of ATMs and bank tellers for withdrawing money.

Moynihan noted that the cash withdrawals from ATM machines and bank tellers was down about 10% to 12% since last year, even though the bank’s overall movement of money was flat to slightly higher. 

It’s a sign, he said, that “people are doing less of the branch,” and turning to mobile-checking alternatives instead.

Working from home has taught bank execs about the importance of going digital, too

Piepszak of JPMorgan Chase suggested that the advent of near-ubiquitous work-from-home policies had taught the firm other important lessons about digital adoption, some of which might affect consumers. 

“It’s very intuitive, very logical to think that there should be some benefits,” she said, “given all we’re learning about the things that we’re capable of with so many of our employees working from home.”

What’s more, Piepszak hinted at the possibility for the bank reducing its spend on its physical footprint, noting: “there’s possible real-estate savings that we could realize.”

When it comes to JPMorgan’s bank branches specifically, Piepszak suggested the bank was still in wait-and-see mode. 

“We are learning a lot, and there is still a lot more to learn,” she said, though she noted that it was possible that the firm could speed up plans to cut branches in certain markets. 

When asked about opportunities to close certain branches, Bank of America’s Moynihan noted that it’s “always going to come down to where the customer …read more

Source:: Business Insider

      

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