How BofA solved the industry’s in-branch card issuance problem

For customers who lose their debit cards, a visit to a nearby branch is often the quickest way to resolve the situation. The challenge is banks are less likely to do this anymore (JPMorgan Chase, for example, stopped issuing debit cards in branches two years ago, citing a fraud risk), and customers often have to wait days for a new card to arrive, adding a new level of friction to an otherwise stressful experience.

To satisfy customers’ need for convenience and to address the concerns over security, Bank of America this week opted for a virtual card solution: digital debit cards that can be issued instantly within its app. This serves two core objectives: it solves bankers’ instant in-branch issuance concerns with fraud, and it’s a powerful reason for customers to use their mobile banking apps more often.

Brent Reston, Bank of America’s chief digital executive for retail banking, noted that the primary motivation was a better user experience. Whether it is the re-issuance of cards in the event of loss or theft or when opening a new account, customers are able to instantly get a digital debit card they can use within Bank of America’s mobile app.

“The biggest [motivator] here was ease of use and providing value to our customers,” Reston said. “Prior to this functionality, customers could go into the app and say ‘Hey, I need a new card’, [but] they would be waiting for that physical plastic in the mail.”

Tiffani Montez, senior analyst at Aite Group, argues that digital card issuance is one of three enablers for contactless card adoption, along with changing consumer behavior and technology. With Bank of America adding digital, tokenized cards within the mobile banking app, it helps transition more customers to digital banking channels. Banks that choose to instantly issue in-app digital cards also can benefit from cost containment and security advantages, she noted.

Reston explained that customers who get a digital card immediately upon account opening will be able to see the card numbers within the app; once they receive their plastic cards, the card numbers won’t be immediately visible anymore. However, customers who want to make online purchases still can retrieve card details from within the app. In addition, if customers lose their phones, they won’t require a new digital card because the card information isn’t stored on the device.

Bank of America’s move to issue digital cards instantly may result in some customers avoiding a trip to the branch, particularly as customers warm to the idea of requesting replacement cards online. According to Fiserv, based on data from 2018 consumer surveys, 56% of customers  said they would rather go online than to a physical branch to request a replacement card. That’s up from 48% in 2017.

For the bank, instant digital card issuance within the Bank of America app enhances the utility of mobile banking and potentially could spur more app downloads and engagements. “Certainly, the ability to instantly use their debit card is a reason to download the app,” Reston said. “I’m excited that our financial center associates, when helping customers open up accounts, can talk to customers about downloading the app. They’ll be able to show [customers] how the digital debit card works, walk them over to the ATM and probably make their first deposit with their digital debit card.”