Banks need to focus on mobile engagement strategies (JPM, WFC)

Major US banks JPMorgan Chase and Wells Fargo announced their Q4 2018 earnings, both of which highlight a need to boost engagement among existing mobile users as growth in new users slows.

annual growth in active mobile banking users at major us banks Business Insider Intelligence

JPMorgan Chases active mobile customers reached 33.3 million during Q4 2018 marking an 11% year-over-year (YoY) increase from 30.1 million in Q4 2017 . That's consistent with the growth Chase saw in Q3 2018, but a deceleration from the 13% annual growth the firm saw in Q4 2017 . The deceleration in growth is consistent with the slowdown major banks have been seeing for several quarters.
Wells Fargo counts 29.2 million active digital customers as of Q4 2018 22.8 million of whom use mobile banking. This marks a 7% annual increase in mobile banking customers a slight sequential deceleration from 8% annual growth in Q3 2018. And the firm saw a 4% annual increase in overall digital customers, an acceleration from 3% YoY growth in digital customers in Q4 2017 . These results indicate that most new customers are coming through the banks mobile channel, and though growth is relatively slow, these results reflect the firm's recovery from its 2016 fake account scandal .

Mobile banking ubiquity and a downturn in new users has forced banks to implement new strategies to boost engagement. Mobile banking is virtually ubiquitous among US consumers: 89% of respondents to Business Insider Intelligences Mobile Banking Competitive Edge Study (enterprise only) said they use mobile banking, up from 83% of respondents in 2017. Because of that saturation, Chase and Wells Fargo have been diversifying offerings on their mobile banking apps throughout 2018, likely driving their growth in users in Q4.

Chase has been focusing on popular offerings like rewards to boost engagement and add value to its app. In November 2018, Chase launched Chase Offers, a feature in the Chase Mobile App that enables its credit and debit cardholders to access personalized deals and earn statement credits when shopping at partner retailers which allows Chase to offer valuable rewards in a cost-effective way if the partners help provide the reward. Implementing additional rewards and tying them in-app can not only incentivize more card spending but also drive app engagement.
Wells Fargo has been enhancing its mobile offerings and working to restore trust both of which likely drove its Q4 2018 growth. Wells Fargos slower growth in mobile banking users can be attributed in part to backlash from its 2016 scandal but it's also a result of mobile banking ubiquity, making additional features important in driving engagement. Though the firms digital banking customers are growing modestly, user growth could, in part, be a result of its efforts to bolster its mobile banking capabilities in previous quarters, like the pilot of Pay with Wells Fargo, an offering that enables users to access their most commonly used payment features before signing into the app. Further, Wells Fargo agreed to pay a $575 million settlement for the 2016 scandal and ramped up its efforts to restore its brand reputation including the Re-Established marketing campaign to restore trust among customers and stakeholders which could allow the firm to put the scandal behind it and continue into Q1 2019 with a larger focus on driving engagement.

Banks need to focus on mobile engagement strategies (JPM, WFC)

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