So much for the bank branch.
Mobile deposits have overtaken in-branch deposits at Bank of America (BAC - Get Report) , the Charlotte-based bank announced alongside its quarterly earnings Monday. The shift has helped the bank cut costs and contributed to its better-than-expected quarterly earnings, CEO Brian Moynihan told investors during a quarterly earnings call.
"By investing in client capabilities, we make our clients' lives easier, more efficient, and more effective and their satisfaction goes up," Moynihan said. "Our costs then in turn go down because our process will become more automated."
Processing a mobile transaction costs banks less than processing ATM transactions and much less than processing transactions in a bank, according to a Deloitte Touche Tohmatsu Limited report. According to Moynihan, Bank of America now processes 76% of its transactions through ATMs or on mobile.
"Every business segment drove expenses lower from first quarter to second quarter even as they continue to invest," Moynihan said. "When people ask for examples of how all this works, how can you invest and develop capabilities while continuing to take down costs and continuing to have higher customer satisfaction, I think the easier way for people to visualize is that in our consumer digital banking capabilities."
Bank of America's focus on mobile banking success does not mean that the bank is moving away from financial centers, however. Moynihan said that mobile banking helps increase the efficiency of the bank branches by allowing customers to make appointments on mobile and employees to focus on mortgage and investment products. The bank announced in February that it plans to open 500 new branches, many of those in Ohio.
"All in all, I see Bank of America delivering on its commitments to improve operations, efficiency and most of all customer experience in the mobile era which is the key to growth and future success," SAS Institute global financial services marketing manager David Wallace said in an e-mail. "The trend to increased mobile banking not only improved customer satisfaction - 80.3 percent in Q2 - but also improved Consumer Bank operational efficiency ratio - 48 percent in Q2, down from 52 percent Q2 2017 - which is the cost to generate a unit of revenue."
The user base of the bank's mobile banking platform grew 11% in the second quarter, following the introduction of its virtual assistant Erica. Bank of America was ranked first in mobile banking functionality by Dynatrace 2Q18 Online Banker and Javelin 2017 Mobile Banking Scorecards.
Bank of America shares rose jumped 4.3% to $29.78 in trading on the New York Stock Exchange. Earlier, it reported a 33 percent increase in Q2 profits compared with last year.