The big banks will kick off earnings season Friday (July 12), as is the case quarter after quarter.
In addition to the usual metrics that will be closely watched by investors, economists and everyone else — the loan performance, the deposits, the debit and credit volumes — we’ll likely get further proof of the inexorable rise of connected banking.
The PYMNTS Intelligence report “How the World Does Digital” noted that across 60,000 consumers studied in 2023 — a sample representative of about 800 million people living in 11 countries — 42% engage with online banking. A full 46.8% do their banking through mobile means.
Drilling down a bit, the total average days tied to those activities stood at more than 10 days for online banking and more than 11 days for mobile banking. In 2023, about two-thirds of consumers used an app on their phone for banking (mobile banking, 68.6%) or from their desktop with a browser (online banking, 66.6%) at least monthly. Almost 47% used mobile banking at least weekly, and 42% used online banking at least weekly
Mobile devices in hand and omnichannel options fueling a digital experience in the branch are part and parcel of the way banks are reshaping the client experience.
J.P. Morgan, Citi and Wells Fargo will report earnings Friday morning. J.P. Morgan, as the largest bank as measured by assets, will arguably set the tone for the macro-outlook governing consumer spending and business resilience.
Inflation pressures have been evident, and net charge-offs have been rising, although they remain within historical levels. In April, J.P. Morgan reported that net charge-offs tied to its card services segment stood at 3.3%, up from 2.1% a year ago during the first quarter of last year. Credit and debit spending were healthy at 9% growth. At the same time, end-of-period deposits were down 7% year over year, to just over $1 trillion. The consumer-level pressures may be evident in the upcoming reporting period.
The puts and takes about various business lines remain to be seen. But the digital shift is firmly in place, and there may even be a lift in positive momentum in terms of digital banking activity and especially mobile users.
Active mobile customers at J.P. Morgan were up 7% year on year to 54.7 million. There is also evidence of what Citi CEO Jane Fraser termed in April as “strong engagement in digital payment offerings,” such as Citi Pay, which is used as a point-of-sale lending product that is integrated into merchants’ checkout processes. Citi’s active mobile users were 10% higher, to 19 million, and active digital users 6% higher, to 25 million. Wells Fargo noted in April that mobile active customers in the most recent quarter were 30.5 million, up from 28.8 million a year prior.
Later in the month, Bank of America will also weigh in with earnings. During the first quarter, Bank of America logged 3.4 billion digital logins, with digital sales accounting for half of its total sales. Additionally, the bank reported an uptick in digital households, reaching 748,000 in the quarter, representing 86% of its installed base. This marked an increase from 717,000 households and 84% penetration in the previous year.
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