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Major US banks, JPMorgan Chase and Wells Fargo, announced Friday their first quarter results in 2019.
Here is what it means:The results of both companies reflect the need to strengthen the engagement of existing mobile users, as the growth in the number of new users slows down.
- Chase added users at a rate of growth comparable to last quarter, but slightly lower than in the first quarter of 2018. Chase's active mobile customer base grew by 11 percent in the first quarter of 2019 to reach $ 34.4 million. active mobile customers. This has not moved sequentially with the 11% year-over-year growth in the number of active mobile users that Chase has seen in the fourth quarter of 2018, with 33.3 million active mobile users . But that's a deceleration from the annual growth of 13% in the number of active mobile customers in the first quarter of 2018, when Chase had 30.9 million users.
- The story is the same with Wells Fargo – stable growth over the previous quarter, but a slight decrease from its previous year growth rate. Wells Fargo's active digital client base reached 29.8 million in the first quarter of 2019, of which 23.3 million use mobile banking. This represents an annual 7% increase in the number of mobile banking customers, sequentially matching the 7% growth recorded in Q4 2018, but a slight deceleration from the 8% year-over-year growth number of mobile banking customers in Q1 2018. annual increase in the total number of digital customers, which is consistent with its first quarter 2018 results. The company attributed its growth in the number of mobile customers to the growth of its global customer base. and increased adoption.
The largest image:The ubiquity of mobile banking in the United States has resulted in a slowdown in the number of new users, forcing banks to find new ways to boost engagement: 89% of those surveyed in the study Business Insider Intelligence's Mobile Banking Competitive Edge Study (company only) indicated that they were using mobile banking, compared with 83 previously. % of respondents in 2017.
- With an established digital platform, Chase is focused on his physical network. As the growth in the number of new users slowed down, Chase focused on its physical network, with branches generally favoring account opening. During the first quarter of 2019, Chase began issuing contactless credit cards with Visa and opened a low-cost account allowing it to reach a new segment of potential mobile users. In the presentation of Investor Day 2019 in February, Chase highlighted an increase in digital channel engagement, noting that the average number of storefront convenience store transactions per customer decreased by 41% between 2014 and 2018, the vast majority (80%) of transactions being made by third parties. service channels like Chase Mobile application. However, Chase found that 70% of the growth of its deposits between 2014 and 2018 came from households frequenting branches. The company has responded by planning to open 90 new branches by the end of 2019, with the goal of ensuring that its physical reach reaches 93% of the US population by 2022.
- While Wells Fargo continues to stand out from its 2016 scandal, it has innovated in different ways to engage existing customers and attract new ones. Wells Fargo agreed to pay a $ 575 million settlement early in the first quarter for its fake account scandal in 2016. While the growth in the number of digital banking customers remains modest, any gain could reflect an improvement in the number of digital banking customers. Mobile banking offer. While the bank continues to invest in technology – Wells Fargo will soon begin issuing contactless credit and debit cards, joining other major US issuers like Chase – and doubling its brand new campaign she could continue to attract customers. Earlier this month, Wells Fargo CEO Tim Sloan resigned from retaliation and, while the company is looking for an external replacement, new leadership could determine Wells Fargo's future trajectory and ability to keep going forward after several years of slow growth.
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