The pandemic has been a huge boon to digital banking across the industry, and arguably nowhere is that more evident than at Bank of America (BAC +0.43%). Many experts say the pandemic helped accelerate digital payment and banking trends by years.
As the world more or less normalizes into a new post-COVID world, these trends don't look like they are going anywhere. Here is a look at three trends that show how digital banking has exploded at Bank of America.
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1. Digital adoption and usage continues to grow
Image source: Bank of America.
In the first quarter of 2022, digital active users grew to 42 million, up 2 million from one year earlier and 5 million from prior to the pandemic. Verified digital users hit 54 million, up similarly to active users. Digital channel usage at the bank, which represents the total number of desktop and mobile banking sessions, hit 2.75 billion, up nearly 7% from one year ago and nearly 27% from the first quarter of 2020. For the first time ever in 2022, consumer banking digital sales surpassed in-person sales, making up 53% of total sales.
Bank of America's CEO Brian Moynihan said on the bank's recent earnings call, "From a broader enterprise perspective, part of managing costs... comes from the drive we have in the company to provide enhanced digital capabilities to our customers, which in turn drives adoption for the digital engagement and lower costs."
2. Strong growth with Erica and Zelle
Image source: Bank of America.
Bank of America's virtual financial assistant, Erica, which is powered with artificial intelligence, saw users and interactions surge during the pandemic. Erica users jumped 34% between the first quarter of 2021 and the first quarter of 2022. Erica transactions grew 17% in that time frame. Since the first quarter of 2019, Erica users have more than quadrupled, while transactions are up nearly 650%.
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Key Data Points
Transactions at Bank of America made through Zelle, which is a peer-to-peer payments system that can transmit money between users in minutes and is owned by a cohort of the largest U.S. banks, grew 25% in the first quarter of 2022 on a year-over-year basis. Zelle volume of $65 billion is up 33% year over year, and 90-day active users surpassed 16 million in the first quarter. Also, as previously reported last year, Zelle transactions for the first time ever surpassed checks written at the bank.
In fact, Zelle has grown so much that several of the largest banks, including Bank of America, are contemplating extending the service as a payment option for online and in-person retail sales, which could really shake up the payments space.
3. Digital is growing in other divisions
In Bank of America's global wealth and asset management division, a record 81% of Merrill Lynch households were digitally active in the first quarter of 2022, while a record 85% of private banking households were digitally active. Additionally, 76% of households were enrolled in eDelivery for bank statements and forms they needed to sign, while 76% of checks at the bank were also deposited through automated channels in Q1.
Bank of America also saw strong digital engagement from its business clients. Roughly 74% of clients in its global banking unit were digitally active, meaning they used one of Bank of America's digital payments products. There were also 1.6 million payments made to digital wallets and 63,000 commercial cards enrolled digitally.
