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Major US banks JPMorgan Chase and Wells Fargo announced their Q1 2019 earnings on Friday.

Here’s what it means:Both firms’ results reflect a need to boost engagement among existing mobile users as growth in new users slows.

Business Insider Intelligence
  • Chase added users at a growth rate consistent with last quarter, but slightly slower than in Q1 2018. Chase’s active mobile customers grew 11% year-over-year (YoY) in Q1 2019 to reach 34.4 million active mobile customers. That’s flat sequentially with the 11% YoY growth in active mobile users Chase saw in Q4 2018 when it counted 33.3 million active mobile users. But it’s a deceleration from the 13% annual growth in active mobile customers in Q1 2018 when Chase counted 30.9 million users.
  • The story is the same with Wells Fargo — flat growth with the quarter before, but a slight dip from its growth rate a year ago. Wells Fargo’s active digital customer base reached 29.8 million in Q1 2019, 23.3 million of whom use mobile banking. This marks a 7% annual increase in mobile banking customers, which is consistent sequentially with its 7% growth in Q4 2018 but marks a slight deceleration from the 8% YoY growth in mobile banking customers in Q1 2018. And the firm saw a 3% annual increase in overall digital customers, which is consistent with its results in Q1 2018. The firm attributed its growth in mobile customers to growth in its overall customer base and increased adoption.

The bigger picture:Mobile banking ubiquity in the US has caused a downturn in new users, forcing banks to find new ways of driving engagement: 89% of respondents to Business Insider Intelligence’s Mobile Banking Competitive Edge Study (enterprise only) said they use mobile banking, up from 83% of respondents in 2017.

  • With an established digital platform, Chase has turned its focus to its physical network. As growth in new users slows, Chase has emphasized its physical network, as branches typically drive account opening. During Q1 2019, Chase began issuingcontactless credit cards with Visa and opened a low-cost account that can allow it to reach a new segment of potential mobile users. At its 2019 Investor Day presentation in February, Chase highlighted an uptick in engagement in digital channels, noting that the average branch teller transactions per customer declined 41% from 2014 to 2018, with the vast majority ( 80%) of transactions completed through self-service channels like the Chase Mobile app. However, Chase found that 70% of its deposit growth between 2014 and 2018 came from households that frequent branches. The firm responded with plans to open 90 new branches by the end of 2019, in a bid for its physical locations to reach 93% of the US population by 2022.
  • As Wells Fargo continues to distance itself from its 2016 scandal, it’s been innovating ways to engage existing customers and attract new ones. Wells Fargo agreed to pay a $575 million settlement in early Q1 for its 2016 fake account scandal. Though digital banking customer growth is still modest, any gain at all could reflect improvements to mobile banking offering. As the bank continues to invest in technology — Wells Fargo will soon begin issuing contactless credit and debit cards, joining other major US issuers like Chase — and doubles down on its new brand campaign, it could continue to attract customers. Earlier this month, Wells Fargo CEO Tim Sloan stepped down amid backlash, and as the firm looks for an external replacement, new leadership could determine Wells Fargo’s future trajectory and its ability to continue to move forward from several years of sluggish growth.

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