Banco Popular digital users surpass 1 million amid Covid-19 crisis
Officials: Mobile transactions break records as senior citizen sign-ups triple
SAN JUAN – Driven largely by the stay-at-home orders issued to stem the spread of Covid-19, registered users of Banco Popular’s “Mi Banco” (My Bank) digital platform for online and mobile transactions surpassed last month the 1 million mark for the first time since the system was launched 20 years ago, bank officials announced Tuesday.
“We reached a mark that we did not expect to reach until year’s end or at the beginning of next year, and we considered that a very aggressive goal. Without a doubt, it is a great milestone,” Camille Burckhart, chief officer of Innovation, Technology & Operations at Popular Inc., said during a teleconference with reporters.
“This happens when ‘Mi Banco’ celebrates its 20th anniversary. It seems to us an incredible and nice coincidence,” she added. “I feel very fortunate to have been part of the team that launched ‘Mi Banco’ in 2000 with 28 customers.”
A record number of customers of Banco Popular, Puerto Rico’s largest locally based bank, registered on its digital platform after the curfew-lockdown executive order Gov. Wanda Vázquez implemented in mid-March to control the spread of the potentially deadly novel coronavirus on the island. The executive order allowed financial institutions to continue carrying out transactions but with restrictions on in-person visits to branches.
Moisés Peña, Popular Inc. vice president of digital banking, said that Mi Banco sign-ups during April and May were unprecedented—increasing by 40 percent compared with the same period in 2019. He said that almost a third of these registrations were carried out by senior citizens, noting that usually between 10 percent and 12 percent of customers in this age range sign up for digital banking.
“The growth of active customers in these two months is equivalent to the organic growth of active customers in a year. As a result, the goal of 1 million active customers was reached in May instead of our projected date in December,” Peña said, noting that Mi Banco logins reached a record 50 million, in contrast to the usual 25 million to 30 million logins a months.
Shift to mobile
As a result, transactions conducted outside of Banco Popular branches, using automated teller machines and online and mobile platforms, reached record-setting levels, Peña said. The use of mobile devices to deposit checks increased five times during the lockdown period, the bank official said, noting that most account openings, 62 percent, were done via mobile device.
Moreover, the share of checks processed through ATMs and digital banking rose from 50 percent to 75 percent, Peña said, adding that transactions involving “Depósito Fácil Móvil,” a mobile application that allows customers to make deposits using only a photo of the check, grew 160 percent since the stay-at-home orders were issued. All in all, digital banking has become Popular’s fastest growing channel, he said, noting that 70 percent of all Banco Popular customers have enrolled in Mi Banco, and 77 percent use the platform monthly.
He said that 94 percent of all payments and transfers managed at Banco Popular are done through digital channels.
Use of Mi Banco to verify account balances more than doubled in the past two months, while transfers between accounts increased 30 percent during the same period, Peña said.
Moreover, for the first time, deposits made using the mobile application surpassed the use of ATMs for such transactions, he said, noting that 62 percent of deposits are done through mobile devices. The bank official said that the “Retiro Móvil” application has grown in popularity because it allows customers to withdraw cash for themselves or others from ATMs with a mobile device, allowing for minimal contact with the machine.
The number of ATM withdrawals went down given that there was less cash in circulation, Peña said. The number of digital deposits doubled, he said, noting that customers deposited five times the amount of money they had been depositing before the pandemic. He attributed this to the federal and local Covid-19 stimulus cash payments.
“That growth of five times would have taken us years to reach,” said Rachid Molinary, Popular Inc. senior vice president of digital strategy and innovation.
Nevertheless, bank officials said they do not foresee the elimination of bank branches due to the increased use of digital banking, at least not in the near future. They noted that many Banco Popular branches could follow the example of the Mall of San Juan branch, which was transformed into a so-called Digital Hub providing self-service banking with just enough staff to provide help when needed and service customers seeking to open accounts.
“Our branches give us a competitive advantage. Many of our customers choose us due to accessibility, which includes how near an ATM or branch is,” Burckhart said, noting that Banco Popular does not plan to launch an exclusively digital bank. “We do not want to force a migration to digital, we want what is more convenient for our customers. Some branches might offer digital transactions like the Mall of San Juan, but we still see them as a strategic element in our future.”
Paying bills, depositing checks and withdrawing cash at ATMs are some of the services that have become more relevant with the impact of Covid-19, as they provide a safe alternative, reducing physical contact, Burckhart said. The ability to complete transactions without having to wait to speak to a bank representative or wait in line at a branch is appealing not only to younger people who are more inclined to use technology but also to anyone with a cellphone or internet access, she said, stressing that registration of people age 65 and older tripled during this period.
“This breaks with the impression that the most tech-savvy people are only among the youth,” she said. “Due to how easy it is to use many of these tools and the advancements there have been in smartphones and in apps—such as Netflix, Amazon and Uber—have made people more comfortable with the technology, and in moments like these tools have gained an impressive relevance.”
Burckhart said that the crisis has encouraged the adoption of “simple technologies” like digital signatures, which she said were used by many of the bank’s commercial clients to apply for federally backed Paycheck Protection Program loans. Many bank customers also applied for loan moratoriums digitally when finding that phone lines were jammed, she said.
She noted that the bank invests about $6 million a year to improve its digital technologies.
Molinary said the bank has worked with digital transaction processor Evertec and smaller companies on the island to develop these digital channels, adding that the bank is collaborating with Puerto Rico’s Polytechnic University and Sacred Heart University to develop other technologies for local needs.
“Our interest is to have most, if not all, of these transactions done in the most convenient manner, whether via mobile or on a PC. We are doing experiments with augmented reality. We are also working on payments through chats,” he said. “Our intention is not only to follow the example of the industry, but also to be able to conceive things that are unique and appropriate for the market in Puerto Rico given the technologies available on the island.”
Molinary said the immediate goal of the bank is to enable all Banco Popular credit and ATM cards to use near-field communication, a method of wireless data transfer that allows contactless point of sale transactions.
“Many business owners have our technology but do not use it because they are not aware it exists or are not interested in it. We have to educate them about these alternatives and their benefits,” he said.