US banks offer full services on mobile

NEW YORK • Banks are going even more mobile. US Bancorp last week was the latest to say it will build a nationally available checking account product as lenders introduce mobile offerings that let consumers do their full banking without a branch.

The move follows similar announcements by some of the country's largest banks including JPMorgan Chase, Citigroup and PNC Financial Services Group.

"All banks are in a push to monetise their digital capabilities," said Mr Bryce VanDiver, a consultant to financial institutions with CapCo. "Mobile channels provide a lower cost of acquisition while providing customers with a straightforward origination process."

While lenders have long offered apps as a supplement to branches, they are increasingly looking to mobile-only offerings to boost their presence in new cities or grab market share among younger, lower-income consumers.

Rising interest rates and the proliferation of online-only banks from the likes of Ally Financial and Goldman Sachs Group pressured the country's biggest firms to gather low-cost deposits.

Some of the largest banks acknowledged in earnings reports last week that growth in the number of active mobile users has slowed.

Using the mobile app to originate business can help improve the profitability of what had been considered a cost centre, Mr VanDiver said.

This year, Minneapolis-based US Bancorp will use a mobile app to expand outside its 25-state footprint. It will start by pitching checking accounts to loan customers, and later will add wealth management services.

Nearly three-fourths of US Bancorp's service transactions - like checking a balance or depositing a cheque - are done digitally, compared with only 14 to 15 per cent of sales, chief financial officer Terry Dolan said. "Five to 10 years ago... you were bound by your geography and you were bound by where you have offices. This gives you the opportunity to expand your reach."

JPMorgan's mobile offering, Finn by Chase, lets customers open accounts, send money and make deposits. In November, Wells Fargo debuted its mobile bank product, Greenhouse.

Others, such as PNC, are leading with mobile but an expanded branch network won't be far behind.

Ms Karen Larrimer, head of retail banking at PNC, said the Pittsburgh-based bank will push its digital wallet in Kansas City and Dallas before following up with a light branch presence in both cities.

"They will not be a typical branch," she said in a phone interview. "We will have it staffed with people who can help navigate the digital world."

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A version of this article appeared in the print edition of The Straits Times on July 24, 2018, with the headline 'US banks offer full services on mobile'. Print Edition | Subscribe