Bank's Results Show How Digital Engagement Has Skyrocketed

Tom Burroughes

22 July 2020

A raft of hard numbers from , e-communications volume has risen by 106 per cent since the start of 2020. Another metric: 39 per cent of checks were deposited via the group’s mobile app, up from 24 per cent in the same quarter a year earlier.

In the private bank, 77 per cent of clients are actively using an online or mobile platform and there has been a 37 per cent year-on-year jump in such active use of the mobile app. Throughout Bank of America as a whole, the group chalked up 665,000 digitally scheduled appointments. There are now about half a million CashPro online users and logins are up by 77 per cent. Digital banking logins rose by 20 per cent on a year ago.

Most banks have talked about faster digital adoption in this time of working from home and the pandemic, but it was striking how BoA set out so much detail. The digital focus is not an accident – it is a part of adding to client engagement and brand loyalty, Kabir Sethi, head of Digital Wealth Management at Merrill Lynch Wealth Management and Bank of America Private Bank, told this publication.

“We have been on this digital transformation journey for a while now on the wealth side,” Sethi said.

“We are seeing clients using various features again and again and that is the exciting part,” he said, noting that such repeat use highlighted clients’ loyalty and engagement with what the firm offers. Digital tools are helping foster client retention.

Clients are using digital channels for basic transactions that would in the past have been done via paper, such as giving “e-signatures” on documents, authorizing payments and changes to investments, for example. They are also using two-way video and other platforms to talk to advisors about more complex financial and wealth management tasks.

“There is definitely going to be an even higher level of digital engagement in a few years’ time,” Sethi said.

A mistake sometimes made when talking about “digital” is assuming that this means “robo advice” but the conversation goes far wider than that, he said.

The increased use by clients of such channels also keeps the Merrill Lynch brand – now more than a century old – nice and fresh, and shows it is not just a legacy brand, but one right in the moment. An important element has been getting advisors to use digital tools more, both when working with clients and in their teams. “The advisor adoption point is really key.”

The conversation about digital engagement and managing the client experience is not a new one. This publication recently published research about the importance of client communications - an area where digital channels are increasingly useful and relevant.

Readers will know how some banks have shuttered branch offices as online use has increased. The rise of internet banking has led to office closures and consolidation. A report in February 2017 from 24/7 Wall Street – three years before the pandemic – cited research predicting that the number of US branch banks will have shrunk by 20 per cent by this year.

But it not just cost savings that drive banks to close branches – although that is a big part of it when cost pressures have risen since 2008 because of compliance burdens – clients increasingly want these digital tools, and so do advisors. Tech is not necessarily a threat to advisors either if they use it to augment their skills and capacities (as discussed here).

As a number of firms have told this publication, even before COVID-19, digital banking prowess is no longer an option. According to McKinsey, the global consultancy, 92 per cent of companies (all sectors, not just financial) thought that their business models would need to change given digitization. The report contains this telling paragraph: “Our consumer-sentiment analysis, for example, has revealed whole new consumer groups trying out digital products and services for the first time. As of this writing, in the United States, some 35 per cent of Gen Zers, for example, have used video chat for the first time (versus just 6 per cent for boomers), while 54 per cent of households with incomes greater than $100,000 have tried online streaming for the first time (versus 35 per cent of those households earning less than $50,000).” (April 20, “The digital-led recovery from COVID-19: Five questions for CEOs”.)

BoA’s data is eye-catching but unlikely to be unique.