Earnings Season Preview: Big Banks and the Rise of Connected Banking

The big banks are set to kick off earnings season on Friday, July 12, with J.P. Morgan, Citi, and Wells Fargo leading the way. As investors eagerly await the latest financial results, all eyes will be on the growing trend of connected banking.

According to a recent PYMNTS Intelligence report, digital banking is on the rise, with 42% of consumers engaging in online banking and 46.8% opting for mobile banking. The report also highlighted the increasing use of mobile devices for banking activities, with consumers spending an average of more than 10 days on online banking and over 11 days on mobile banking.

J.P. Morgan, as the largest bank by assets, is expected to set the tone for the overall outlook on consumer spending and business resilience. Despite inflation pressures and rising net charge-offs, the bank has seen healthy growth in credit and debit spending. However, end-of-period deposits have decreased year over year, indicating potential consumer-level pressures.

On the bright side, there is a positive momentum in digital banking activity, with active mobile customers at J.P. Morgan, Citi, and Wells Fargo all showing significant year-on-year growth. Citi CEO Jane Fraser highlighted the strong engagement in digital payment offerings, such as Citi Pay, while Bank of America reported a surge in digital logins and sales during the first quarter.

As the banking sector continues to embrace digital transformation, the upcoming earnings reports will provide valuable insights into the evolving landscape of connected banking and the impact on consumer behavior. Stay tuned for more updates as the earnings season unfolds.