Bank of America Corporation (BAC) and Wells Fargo & Company (WFC) have recently launched new retail services that are accessible through smartphones. These initiatives are part of these two banks’ ongoing cost-containment measures. This reflects the latest trend in the banking industry to capitalize on the growing popularity of mobile banking services.
BofA has come up with a service that will permit customers to make deposits by presenting photo of a check through their smart phones. Moreover, the company has introduced a service that will enable customers to transfer funds via email addresses or mobile phone numbers. In addition, BofA has initiated a coupon program that allows customers to receive discounts from retailers by clicking on offers sent to their online banking accounts.
Wells Fargo has also launched its mobile check deposit service earlier this year. Now, the company is planning to make the service available throughout the U.S. by the end of this year. Along with this service, Wells Fargo has also launched its money transfer platform – clearXchange – a collaborative venture by BofA, Wells Fargo and JPMorgan Chase & Co. (JPM).
clearXchange is intended to provide a competitive deterrent to certain vendor-led companies that have been eating away banks’ revenue. With clearXchange, consumers can directly transfer money without the need of vital information like the bank account numbers. The transfer can take place using cellular phone numbers or email addresses.
The increasing use of mobile banking services will help banks like BofA and Wells Fargo to trim their expenditure and improve efficiency. Moreover, with a dismal economic backdrop, it becomes necessary for banks to resort to cost-cutting measures in order to survive the tough times ahead.
BofA has been planning to shutdown approximately 750 branches over the next couple of years and it recently has closed around 9% of its ATMs. The enhanced mobile banking services will help BofA achieve its efficiency improvement target.
For Wells Fargo, clearXchange will surely boost its payments businesses by upsetting its rival’s efforts to encroach the bank’s revenue territory.
Currently, shares of BofA retain a Zacks #3 Rank, which translates into a short-term Hold rating. The shares of Wells Fargo also retain a Zacks #3 Rank.
BANK OF AMER CP (BAC): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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