Bank of America Corp. again spent much of its earnings call focused on mobile banking efforts, touting continued gains in mobile usage and large growth in person-to-person payment volume following the launch of Zelle.
While reporting third-quarter results on Oct. 13, the bank noted that 21% of its deposit transactions now occurred via a mobile device, up from 18% in the 2016 third quarter. Management also highlighted the bank's leading role in Zelle, a mobile app that enables person-to-person transactions across many of the leading U.S. banks. In the third quarter, person-to-person payments totaled $4.0 billion, up from $2.4 billion a year earlier.
Customers' increased use of digital applications offers a savings on expenses relative to cash and check transactions, as well as lower operational risk, management said. The bank is also able to reduce its branch footprint, reporting a total of 4,511 financial centers in the third quarter, down from 4,629 locations a year ago. At the same time, the bank has spent money upgrading its existing branches and investing in new technology.
"Optimization and digitalization savings were more than offset by investments in refurbishing branches and technology initiatives," said CFO Paul Donofrio.
During the question-and-answer portion of the call, analysts pressed for specifics on technology driving down expenses or the bank's ultimate vision for its branch footprint. Management generally demurred. An analyst noted that BofA's efficiency ratio in the consumer banking segment was 51% in the third quarter and should dip below 50% as Zelle usage expands. CEO Brian Moynihan said the company expects the number to fall below 50% but said there is no set goal in mind since management hopes to press for continual improvement on expenses. Similarly, in response to a separate question, Moynihan said the bank's final branch count would depend on customer behavior considering branches continue to service 750,000 people on a daily basis.