Finally, a Major Bank Admits Mobile Is a Game Changer

January 14, 2013
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shutterstock_117564664You bank with your smartphone or tablet. I bank with my smartphone and tablet. Everyone you know banks with her smartphone or tablet.

Finally, one of the nation’s four major banks admits that mobile banking is changing the face of financial services.

In last Friday’s earnings call, John Stumpf, chairman and CEO of Wells Fargo & Co., admitted what we all know: that mobile banking matters greatly.

Stumpf was asked whether the number of Wells branches (there are more than 6,000 of them, parenthetically) will decline. His answer: mobile banking is influencing that decision.

… I couldn’t be happier about the 6,000 or so stores that we have and stores still today remain incredibly important in the overall distribution community. Even though online, especially tablet, the so called lean-back technology, is changing the industry.

Most customers choose their first financial services provider based on proximity to where they live and we have a store within two miles of half the American population. It’s a huge advantage.

But we used to build 5,000 square foot stores with a 10 penny sign. Now we’re building 10 penny stores with a 5,000 square foot sign. It’s more important because if customers come there and then use other technologies, they want to be able to go and say, that’s where my money is, that’s where I can go if there is an issue, that’s where I go if I have a big transaction to do. So, stores still remain an incredibly important part of the ecosystem of delivery.

That might change over time and the tablet or the smartphone is changing the way customers do business with us. They are on with us much more. They are learning more and we’re doing, have all kinds of experiments and test going on, paperless stores and more self-service.

But and change is not new to us. I mean we’ve been — we had at one time in this company one service model. It was a stage coach and that went away after a few years and we have tried something else, so this is — I find this exciting.

Stumpf went on to say that the aggregate square footage of Wells branches will likely decline at Wells, which should decrease the bank’s real estate expenses. That is, assuming the bank doesn’t need to leave room at its branches for stagecoaches.

It should surprise few that Stumpf is addressing mobile banking now. Wells is preparing a launch of a tablet app, as well as a revamp of its smartphone app, for release early this year.

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6 Responses to Finally, a Major Bank Admits Mobile Is a Game Changer

  1. Brian Hanafee on January 14, 2013 at 10:24 am

    > Wells is preparing a launch of a tablet app, as well as a revamp of its smartphone app, for release early this year.

    The tablet application was released in December https://itunes.apple.com/us/app/wells-fargo-for-ipad/id579446739

    • Philip Ryan on January 14, 2013 at 11:43 am

      Thanks, Brian. As of late November, Wells was projecting a January release for both Android and iOS tablets, but as you point out, the iOS version arrived early. The Android version is still forthcoming.

  2. Brett King on January 14, 2013 at 11:37 am

    I’ve been saying this for 4 years now, glad to see the industry is catching up with customer behavior. The wrinkle is that with the nature of banking changing rapidly, the role of banks themselves has to significantly change. The role of intermediaries and new players can’t be underestimated.

  3. Joe Sullivan on January 14, 2013 at 6:17 pm

    Excellent article and Mr. Stumpf is spot on. We are consistently talking with our clients about a multi channel approach, the need to re-purpose some or all of the branches, and to reduce the size and overhead of that expenditure. All of this while recognizing that the bricks and mortar is a way for clients to engage with the brand and embrace other delivery channels, especially mobile.

  4. Bill Lynch on January 18, 2013 at 9:23 am

    The very makeup of bank management is inhibiting their ability to recognize and respond to change. While they’re finally beginning to ‘say’ the right things, their actions are still stuck in analog. I have a great respect for Mr. Stumpf and hope that Wells amps up their branch strategy.

    I agree with Brett that intermediaries and new players will become a major force. The next 5 years are going to be a blast!

  5. Alex Johnson on April 1, 2013 at 11:44 am

    I appreciate Wells’ stance on the branch. While mobile is changing the industry the branch is still important. People still choose the branch method of distribution for major transactions and I appreciated Stumpf’s point about customers finding a sense of comfort and confidence in being able to physically see where their money is kept, as well as knowing that there is a place that they can go if they have an issue or need help. Many people have been quick to say that branches are dying. I don’t think that the branch is dying, I think that others need to follow Wells’ direction and simply redefine what their branches look like and their use cases for them.

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