Wells Fargo’s digital strategy is showing results. In an earnings report Tuesday, the bank confirmed it had 13.2 million “digital active” customers in the third quarter of 2019, up 4% year over year. The bank also saw a 7% increase in mobile-first customers.
Wells Fargo’s digital push coincides with efforts to rationalize its branch footprint. The bank reported that it consolidated 52 branches in the third quarter of 2019, bringing the total number of branches to 5,393 locations. Meanwhile, teller and ATM transactions declined 6% from a year ago, evidence of continued customer migration to digital channels, according to John Shrewsberry, executive vice president and chief financial officer.
The bank is using its branches as focal points to teach customers about digital tools. “We’ve enhanced training and coaching for our team members in our branches, including an increased focus on educating our customers about our industry-leading digital capabilities,” Shrewsburry said.
Over the past year, Wells Fargo has taken a series of steps to digitize customer experiences. In September, the bank entered into an agreement with data aggregator Plaid to safeguard customer data and enhance customer control over account data. The same month, the bank rolled out a blockchain-based initiative to speed up cross-border money transfers for corporate clients. Wells Fargo also is taking steps to grow the capabilities of Control Tower, a digital control center where customers can access their entire financial footprint.
While the bank reported improvements in digital engagement and in-branch customer experiences, the effects of prior scandals still are affecting the company’s bottom line. The bank reported $1.6 billion in litigation expenses related to prior scandals. Meanwhile, net income for the third quarter stood at $4.3 billion, down 23% from one year ago.
Despite these challenges, Shrewsburry said he is confident that the bank’s strategy will result in improvements in the company’s financial position over the long term. “I’m optimistic that our continued efforts to transform Wells Fargo and the fundamental strengths of our franchise will continue to position us well for success,” he added.
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