Bank of America, which is planning to launch its first online banking service in the U.S. next year, said on Wednesday it plans to open a new branch in Philadelphia.
The move follows BBVA’s acquisition of the Boston-based online banking unit of American Express in January.
The merger, announced at the time, was the first in a string of consolidation moves in the industry.
Banks in the region have been struggling to fill customer roles, especially as online banking accounts were only recently introduced.
Online banking has been a key piece of the solution to filling the gap in customer service, said John Schmitt, chief financial officer at American Express.
Bills in the area have also struggled to cope with the surge in demand for credit and debit cards.
Bubbles have been popping up in the local banking system in recent months, and many residents have started to complain about poor service and the lack of availability of online banking.
But the biggest problem is that people can’t afford online banking as their incomes have not grown significantly over the past five years, according to Schmitt.BBVA’s move comes as online banks have been increasingly competing with traditional banks.
In some areas, like Atlanta, there are two banks, one in the metro area and one in a smaller town outside the metro.
Some banks, such as JPMorgan Chase & Co., are offering mobile banking services.
Other companies are trying to disrupt the online banking space, with Amazon offering its own online payment platform in partnership with Bank of North America.
Some large banks, including Citigroup Inc. and Wells Fargo & Co., have also started offering services to customers through mobile apps.
Bets and short positionsThe biggest bet for the company to succeed is its ability to get people to use its banking service for its own business purposes, said Schmitt of American Capital Partners LP, which manages $8.3 billion in assets.
The company has been able to raise $500 million in venture capital, he said.BBV will not need the funds to complete its service, which it has been working on for more than a year.
The bank has already added new services to its online banking offerings.
In February, the company announced plans to add more online banking features, such a more-detailed account management tool and customer service tools, Schmitt said.
That was part of the reason why the bank opened two new branches in Atlanta and in North Carolina, he added.
In addition to offering online banking services, BBVA has also been focusing on its local customer base, including offering credit and banking services to people who are in their home states, Schmit said.
It has been doing this by increasing its use of mobile banking, expanding its mobile payments capabilities and building up a customer network, he noted.
In January, BBV said it will add new mobile banking offerings to its mobile platform, including a mobile-payments app that allows customers to make payments from their smartphones.
The app will also include an app for customers to deposit and withdraw money.BBVB plans to expand its offerings in other areas, including online banking and e-commerce, Schiff said.
This includes expanding its offerings to customers who are already members of its online-only bank, as well as adding additional services in the banking space.