2 Reasons You Should Thank Bank of America
Oct 19th 2013 9:49AM
Updated Oct 19th 2013 9:50AM
When it comes to mobile banking, Bank of America has always been on task and has included apps especially suited for tablet banking when peers Wells Fargo and JPMorgan Chase did not. It has continually worked to expand its base of mobile customers, realizing that doing so can be a real cost-saver.
Bank of America has also made progress with its website, which has been one of banking's most prickly, causing outages that have enraged consumers. New research shows that much work needs to be done in that regard, however -- and Bank of America risks losing customers if it doesn't take steps to keep its online presence viable.
Mobile is clocking more gains
Bank of America's third-quarter earnings report noted that it has increased its number of mobile banking customers to 14 million, a 26% gain year over year. This brings Bank of America close to JPMorgan Chase's 15 million mobile users, and far above Wells Fargo, which currently boasts 11.5 million mobile customers.
It also spotlights just how much emphasis Bank of America puts on its mobile initiative. In the year-ago quarter, the bank had 11.1 million mobile customers, and at the end of 2011, that number stood at 9.2 million. At a recent conference, Bank of America estimated that the cost of processing a mobile deposit is 13.6 times lower than it would be to deposit the same check at a physical banking location.
Online and mobile banking are closely tied
Whether customers access their accounts using a laptop, tablet, or smartphone, the quality of the bank's website matters -- something that has been a recurring problem for Bank of America. The bank has a history of frequent site issues, such as the outage that occurred in February, when the site was down for 10 hours. This puts Bank of America at a disadvantage to its peers JPMorgan Chase and Wells Fargo, neither of which have anywhere near the total number of site outage complaints that Bank of America has logged.
I decided to take another look at SiteDown, to see how Bank of America has fared since that wintertime fiasco. I hadn't heard of any other big site problems since that time, so I checked the three big banks against each other -- and was pleasantly surprised by what I found.
While Bank of America logged the largest number of "site down" complaints in the last 30 days -- 118 compared to JPMorgan Chase's 61 and Wells Fargo's 47 -- the complaints registered within the last seven days was a mere 20, compared to JPMorgan Chase's 30. Subtracting the total number of complaints from when I last checked in February, Bank of America has only accumulated around 2,340 grievances since then, compared to JPMorgan Chase's 2,880. Wells Fargo registered only 1,050 gripes about its website since the last time I looked.
More work needs to be done
It seems clear that Bank of America has cleaned up its online act to a great degree, but the number of grumbles over the past 30 days shows that the bank still has a ways to go. A recent study shows that, when it comes to online and mobile banking, customers are becoming less patient with bank sites that don't respond nimbly to consumer requests.
The Financial Brand reports that, although 68% of survey respondents said they will wait up to six seconds for a bank's site to load, most will click off if the load time exceeds two seconds. For 42% of consumers, one bad experience with a banking site will cause them to cancel their transaction, and 15% would even consider changing banks.
Does this mean Bank of America is in danger of losing customers to, for example, Wells Fargo? Perhaps. There's no doubt Bank of America made significant headway with its online and mobile banking initiatives, but it will need to keep up with consumer sentiment if it is to retain customers. As the bank continues to close branch locations, virtual banking is becoming more important than ever.
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The article 2 Reasons You Should Thank Bank of America originally appeared on Fool.com.Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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