Digital banking soars in the COVID-19 pandemic
With digital banking usage rising at a near historic pace, Wells Fargo and other banks have geared up to handle the growing customer demand during the coronavirus crisis.
Nota del editor: También está disponible una versión en español de esta historia.
From first-time digital accounts and mobile deposits to requests for payment deferrals, millions of customers have flocked to digital banking at a near historic pace during the stay-at-home public health emergency of the COVID-19 crisis. Digital traffic in the financial sector has soared in recent months as Wells Fargo and other banks ramped up to respond to customers going digital amid the pandemic.
Banks have seen a double-digit rise in first-time online accounts, mobile deposits, mobile payments, and overall usage of online and mobile banking, according to polling research by J.D. Power and Ondot Systems Inc. The numbers are showing no sign of abating, even as the U.S. gradually eases emergency restrictions.
“The COVID-19 pandemic has accelerated consumers’ adoption of digital banking and payment options at a staggering pace,” PaymentsJournal reported May 14, citing Ondot research. “Even after the world emerges from COVID-19, much of this change in consumer behavior will be here to stay.”
For Wells Fargo and its peers, the surge in digital demand has produced some dramatic numbers. Use of mobile banking apps, for example, reached 72% of customers at the four largest U.S. banks in April 2020, up nearly 10 percentage points from 2019, American Banker reported, citing J.D. Power research.
The amount of money Wells Fargo customers deposited using a mobile device was up 81% in April 2020 compared to April 2019, and there has been a 23% surge in customers signing on to digital banking since the pandemic emergency restrictions took effect in mid-March, according to company data. Overall use of digital banking reached 30.9 million active digital customers as of Feb. 29.
“That shows significant behavioral shift,” said Ben Soccorsy, head of the Wells Fargo Digital Payments team. “We are seeing a mix of increasing engagement with existing customers and customers who have historically not used digital banking. We’ve been preparing for this shift for a long time, listening closely to our customers, and investing in our digital capabilities. Now the shift is happening essentially overnight and we’re there to support our customers more than ever.”
Technology serves in time of crisis
Wells Fargo has run the gamut in its services for digital customers during the pandemic. For example, a restaurant owner in Oregon received an online loan approval; an office manager in Montana received debt payment deferrals; a jeweler in California opened a new online account with an electronic signature; and a doctor in Minnesota used Wells Fargo Online® Wires to pay for COVID-19 protective gear from China.
Another customer, a nurse in Kansas, described reaching out to the bank through its website and requesting mortgage relief in March: “I sent a message on Monday and received a message today,” she said in a social media post. “They granted my request, and I literally cried tears of joy! This allows me to take my full family leave time to stay with my family and newborn.”
Such results demonstrate digital banking’s value to customers in a time of crisis, said Mary Mack, CEO of Wells Fargo Consumer and Small Business Banking. The bank has also equipped its branch employees with the skills to guide customers in the most effective usage of its self-service digital tools, she said.
“Customers expect their digital interactions with us to keep up with the pace of innovation they see elsewhere in their daily lives,” Mack said. “We’ve been launching new digital access points quickly to help our customers with their financial needs as they are facing new challenges that they probably never anticipated. And we will continue to innovate so customers can do business with us in ways that best suit their needs.”
As of May 5, the bank had provided mortgage and other financial relief to more than 1.7 million consumer, small business, and commercial customers, including 1.4 million payment deferrals representing $4.6 billion in principal and interest. It also approved 1.8 million fee waivers representing more than $75 million.
To handle the wave of new digital activity, Wells Fargo launched a companywide rapid action plan to bolster its digital infrastructure, said Jim Smith, head of Wells Fargo Digital Platform.
“Through increased system capacity, enhanced automation, and the creation of a number of new features, we’ve been able to serve the vast majority of customers promptly and effectively,” he said. “The effort took focused coordination and collaboration, and the results are a testament to the expertise that is part of our DNA.”
Launching new digital capabilities
In less than a month, Wells Fargo Digital and its line of business teams partnered to introduce a number of new digital capabilities to expand the toolbox of Wells Fargo Online. The new features included online requests for mortgage payment deferrals, digital applications for the small business Paycheck Protection Program, expanded support for customers to deposit stimulus payments, and higher limits for mobile deposits. The teams also created COVID-19 updates for customers on the website and for employees working remotely at home.
Five groups across the company collaborated on the work, including Corporate Strategy, Digital & Innovation; Home Lending; Consumer & Small Business Banking; Commercial Banking; and Wells Fargo Technology.
“We have amazing technology and design teams that work with us and our line of business partners to deliver digital functionality for our customers,” said Katherine McGee, leader of the Wells Fargo Digital team. “Working together has helped us become very successful at delivering features and capabilities customers need in digital banking.”
In many ways, the company has been preparing for a crisis like COVID-19 since it became the first major bank to launch online banking 25 years ago, she said.
“What’s different about this crisis is that online banking is now one of the primary connection points for customers to their bank,” McGee said. “The digital functionality that we have provided for years is becoming an essential service. While we still provide them with the ability to make an appointment to see a branch banker, many customers are still sheltering in place and don’t want to leave home. So digital becomes their interaction point.”
‘Amazing to see how we got here’
Long before digital took center stage in the COVID-19 crisis, Denise Thomas signed up customers through AOL for Wells Fargo’s banking website — a cumbersome process that filled a room with daily printouts of enrollment forms.
“I remember thinking, ‘How are we ever going to process all of those?’” said Thomas, then an online customer service specialist. “Everything at that time was done on paper. There were no smartphones and no mobile banking. Not many people even used the internet, and even fewer used online banking.”
Fast forward to 2020, and it is literally a different world — a fact highlighted by the role of online and mobile banking during the pandemic, she said.
“Mobile deposits, payments, and other mobile banking tools are just so critical for customers these days as they need to send money to each other, elderly parents, and family members,” said Thomas, now a manager in Wells Fargo’s Customer Excellence division.
“We have come so far in keeping up with technology, doing what is right for customers,” she added. “And it’s making a difference now. Who would have imagined so many years ago that one day we’d be using our phone to take a picture of a check for a bank deposit? It’s just amazing to see how we got here.”
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