Bank of America (NYSE: BAC) may be the largest U.S. bank when measured by deposits, but is still struggling to meet the demands of customers in the new technology centric economy.
The firm is seeking to hire three executives to improve its retail online and mobile-banking services, said two people with direct knowledge of the search. Heidrick & Struggles, a Chicago-based recruiter, has been retained to find a head of business development, a sales manager and an executive responsible for online and mobile strategy, said the people, who declined to be identified because the search is private. The target population so far has been managers with experience at rival banks, some of which have been reportedly interviewed. The three new positions will report to David Owen, who is responsible for the Charlotte based firm’s online and mobile accounts, as well as its fraud department.
Between smartphones, I-Pads, and similar devices, financial firms are facing new client demands that their existing business models don’t fully satisfy. This presents a particular struggle at Bank of America, which is under pressure to trim costs and close branches because U.S. curbs on overdraft and debit-card fees could cut annual revenue by about $2 billion.
At a March 8 conference, Price said that Bank of America has 29 million Web accounts and 6.5 million mobile-banking users, ranking it first among U.S. lenders. As people come to rely more in the Internet and smartphones to access checking accounts, online and mobile phone services will become increasingly important to any bank’s customer service strategy.
Anne Pace, a Bank of America spokeswoman commented that the company will “continue to invest” in online and mobile banking to better serve customers, but did not elaborate further. Following Chief Executive Officer Brian Moynihan’s comments that expenses were not satisfactory and must come down, this will surely be a challenge. The bank will close more than 500 of its least- profitable branches over the next few years.
Hunt added “We really are starting to have a lot of customers that aren’t going to visit branches, period.” The number of U.S. mobile-banking users is expected to surge more than 300 percent to 77.3 million by 2014, from 18 million last year, according to Boston-based consulting firm Celent. Celent added that this rise is fueled at last in part by the popularity of Apple (NASD: AAPL) products.