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JPMorgan Chase counts 51 million active digital customers as of Q2 2019 — up 6% year-over-year (YoY) — 35.4 million of whom use mobile banking, marking a 12% spike YoY.
Chase is leading the pack among major US banks in terms of digital banking users — and there are several factors fueling that lead:
- Major banks allocate enormous sums of money to tech investments, and Chase is the biggest spender. JPMorgan’s IT budget stands at $11.4 billion versus Bank of America’s $10 billion and Wells Fargo’s $9 billion. And Chase is pouring more and more funds into its services: The firm’s total expenses rose 2% to $16.3 billion in Q2 2019 due to further investments in both technology and its branch network — and it expects to spend $66 billion in total this year, per The Wall Street Journal.
- Chase is bolstering its digital channels with new features — and digital account opening, in particular, is a standout. Chase CEO Jamie Dimon said the firm opened more than 2 million accounts digitally. More notably, Chase CFO Jennifer Piepszack said in the firm’s earnings call that "digital account opening is now 25% of our new account activity." The firm has been bolstering this feature: For example, it’s reduced the time it takes to open an account digitally to 3-5 minutes on average. And as mobile banking reaches ubiquity, it will become especially important to offer a seamless digital account opening process: 89% of respondents to Business Insider Intelligence’s Mobile Banking Competitive Edge study(Enterprise only) said they use mobile banking, up from 83% in last year’s study.
- Investing in its mobile banking app is likely allowing Chase to attract millennials. Dimon noted in a previous interview that the firm is "gaining share in millennials every day," despite the segment’s infrequent branch visits — highlighting the importance of mobile banking to customer acquisition among digitally inclined customers. By appealing to younger customers early on, Chase could convert them to higher-value customers in the long run. As Chase prepares to shutter Finn, its digital-only bank tailored to millennials, Dimon remained confident about the bank’s positioning with the customer segment.
But Chase isn’t narrowly focused on growing digital — it’s also investing in its physical network, which still drives 70% of its deposit growth. Households that frequently use branches have driven 70% of Chases’ deposit growth between 2014 and 2018, and more than 1 million people visit Chase branches daily.
The firm’s investments in digital haven’t been at the expense of its legacy channels, demonstrating the importance for major banks to balance both areas. The firm is in the midst of executingits $20 billion investment plan to open up 400 new branches — which it expects will allow it to reach 80 million more customers.
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