Bank Tactics

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Bank Tactics


In the United States, the top 5 major banks are: JPM, CitiGroup, Bank of America, Wells Fargo, and BT&T. They are using several tactics to build deposit growth such as: investment in digital banking and technology (JPM, Citi, BoA), brick and mortar branches (JPM), automated branches (BofA), acquisitions of other banks (BBT), and appealing to milliennials (JPM). For each of the tactics, the banks listed are just examples that highlight their success, they are not the only banks employing these strategies, and it’s likely that all banks try to use each method in one way or another.


As of June 30, 2017- The top four total Deposits are:

JP Morgan Chase and CO- $1,311,974,142
Bank of America- $1,287,869,700
Wells Fargo & Co.- $1,258,831,130
CitiGroup Inc.- $504,706,288.

JPM now lays claim to 11% of total U.S. bank deposits, jumping nearly 8% over the past year, compared with 5.3% for BofA, according to the FDIC. The Big Four U.S. banks hold a combined 37% of the country's deposits, according to S&P. The rest of the top 50 banks have another 35.5%. That leaves the thousands of remaining U.S. banks with barely one-quarter of the market.

Digital banking

Online banking has become the go to choice for most people 50 and younger. JPMs digital consumer banking users grew 6% in Q3 of 2017. JPMs CFO, Marianne Lake, mentioned that, “having a leading digital capability is critical to our overall customer franchise, and it will in all likelihood have an impact on stickiness of deposits because customers value that kind of convenience very highly.” Citi is following suit and reducing its, "physical footprint" and focusing on digital. Citi reported digital users grew 13 percent to 17 million, and mobile users grew 21 percent to 9 million compared to the same period the year before. Bank of America CEO Brian Moynihan mentioned "the bank spent $2.25 billion on technology initiatives in the first three quarters of 2017. The bank also now sees mobile devices account for 1 of every 5 deposit transactions."

Bank of America has been working actively in encouraging digital growth through technological developments that help customers have better experiences. The bank has partnered with Zelle which is a peer-to-peer (P2P) payments service. Mobile deposits now represent 21% of all deposits; up from 17% a year ago, which will enable the bank to reduce annual operating expenses next year. Mobile deposits, "cost one-tenth of what it costs to do over-the-counter," according to CEO Brian Moynihan who was quoted by Yahoo. Bank of America added roughly 1.8 million digital users last year to reach 24 million in Q2 ’17. This puts Bank of America just ahead of Wells Fargo, which boasts 20.4 million mobile users, but it still lags JP Morgan Chase, which has 28.4 million users.

Automated branches

Bank of America is redesigning its branch buildings; more tech. It began testing three so-called automated branches; new retail centers that are something less than full-fledged financial centers but rather more than ATM vestibules. Each automated branch is equipped with an ATM, and each also offers one or two video conference rooms, where customers can have private, Skype-style meetings with mortgage-loan officers and other specialists. The transformation reflects a new understanding of the way customers are using branches today." Half of all deposits are now made at the ATM, 20% on mobile devices and 30% with the help of tellers. 61% of Bank of America's millennial customers use ATM s to withdraw cash, while only 15% take out cash at the teller window. Bank of America has shed nearly a quarter of its branches through sales, consolidations and closures since 2009. According to the American Banker, Wells Fargo's retail network has over 1,000 branches more than any other bank in the country. Wells Fargo announced in January "that it planned to shut more than 400 of them by the end of 2018."

Brick and mortar

Keeping brick and mortar branches open has worked well for JPM. For the first time in more than 20 years, JP Morgan Chase has the most deposits—$1.31 trillion as of June—of any US bank. Part of how it got there was through storefront branches, with some 75% of its growth in deposits coming from customers who use them. But they are slowly closing physical branches, the bank now has 5,174, down about 5% from a year ago. “Those outlets still appear to offer a type of service its newer competitors can’t provide,” Lake acknowledged in a conference call today, (Oct. 12). But customer preferences are changing, as mobile banking at JP Morgan has increased 12% in the past year." Bank of America is retooling its brick and mortar branches and reducing the number of teller windows; some centers have as many as 25 windows, and placing greater emphasis on closed-door meetings.

Acquisitions of other banks

BB&Ts strategy is acquisitions. Core deposits are generated within the bank’s core markets, hence the name, and are usually in the form of checking and savings accounts. How “sticky” these core deposits are can serve as a good measure of customer loyalty. BB&T Corp. demonstrated the highest level of core deposit growth; while also maintaining a low cost of funds. Much of that growth came through its acquisitions: National Penn, in 2016, and Susquehanna, and Bank of Kentucky, in 2015.

Reaching millennials

JPM released a new mobile-only app that let’s people sign up for a bank account within minutes. It’s called Finn by Chase, it includes a checking and savings account and a physical debit card, has no monthly fee, and it doesn’t allow overdrafts. Finn includes personal financial management tools, like allowing users to set up savings rules: the app will automatically save $5 every time someone goes shopping. It was designed to be helpful because Chase’s research showed many millennialsfelt judged by a lot of their other financial experiences,” said Matt Gromada, the product lead for Finn.


So in conclusion, tactics to boost deposits being utilized by large U.S. banks include: going digital, automating branches, retooling brick and mortar branches, acquisitions, and appealing to millennials. Most large banks are experimenting with all tactics, going digital for the younger generations; but also being there for those who avoid technology.