Revealed: mobile banking customers at worlds largest banks – the huge, the tiny and the AWOL

If you want to know how seriously a company takes mobile, study the annual report. The reports of the world’s largest banks show that they – and their investors – consider mobile banking to be very important. And that’s not surprising considering that there are expected to be 1 billion mobile banking users in 2017, according to Juniper Research (January, 2013). But it’s not until you compare mobile banking numbers at each institution that you get a proper perspective on performance: Chinese banks are world leaders; US banks are making excellent progress; European banks are laggards; ‘smaller’ banks are shy of disclosing mobile numbers for investor/public scrutiny.

mobiThinking examined the 2013 annual reports and earnings call transcripts of the top global banks, taken from Forbes’ top 100 public companies. There are 27 banks in the top 100, but few outside the biggest 12 reveal numbers of mobile banking users, so we will focus on the big boys. There’s a table below, following the analysis.

Mobile top of the agenda

• Warning: many of the annual reports linked in this article are large PDF slow-to-download files.

The first thing of note is the prominence that the biggest banks give to mobile banking. In the reports of JPMorgan Chase and Bank of America (BofA), for example, mobile is now included under “key drivers/statistics”. BofA stands out particularly, highlighting the number of mobile banking customers on page 1 of its report (see image below). Note: this is mobile being highlighted not online – BofA has even trademarked its new tagline “Life’s better when we’re connected”.

Many banks, mostly those outside the big 12, do not reveal the actual number of mobile banking customers – it’s not clear whether this is a conscious decision or an oversight. But a lot do detail their mobile initiatives, and remark on the growth of mobile banking – often really interesting stuff. For example, Australia’s Commonwealth Bank sees 70 percent of NetBank logins coming from mobile devices – as 46 percent of Commonwealth Bank’s transactions are via the Internet, you’d expect the number of mobile users to be substantial, so its surprising not to see it included in the annual report.

This all goes to show that mobile is high on the agenda for all banks, so expect more to include mobile banking numbers in the 2014 or 2015 annual reports, as the numbers improve… or as investors start to ask the right questions.

Image shows: screenshot of page one of the Bank of America report highlighting its mobile achievements.
Image: Life’s better when we’re connected – Bank of America highlights mobile on page one of the annual report: 14 million + banking customers are now making mobile connections, staying in touch with their finances anytime, anywhere.

Chinese banks: massive mobile banking numbers

When it comes to mobile in China, all the numbers are jaw-droppingly huge – banking is no exception. Let’s do the sums – China Construction Bank (CCB) 117 million mobile banking customers + Industrial and Commercial Bank of China (ICBC) 100 million (at least) + Agricultural Bank of China (ABC) 83.0 + Bank of China (BoC) 52.1 million: that’s a cool 352.1 million. That means there are more mobile banking customers at these four Chinese banks than there are inhabitants in the United States.

If Juniper Research was correct in its estimates of 590 million mobile bankers worldwide in 2013 (it does seem a little conservative), then these four Chinese banks account for 60 percent of the world’s mobile banking population.

The amazing thing is these 352.1 million people are doing mobile banking by mobile Web and mobile apps (unfortunately this isn’t split out, but it must be safe to assume that mobile Web has the lion’s share). It does not include SMS banking services, e.g. mini-statements – SMS subscribers are even bigger: 199.5 million at CCB and 197 million at ABC – the latter sent 9.4 billion SMS messages to subscribers in 2013. Most importantly, these Chinese mobile bankers are active: averaging 10 mobile transactions per year at CCB, while ABC customers racked up RMB1.55 trillion (US $249 billion) worth of transactions.

From CCB annual report:

“The number of mobile banking customers was 116.52 million, an increase of 38.88 percent over the previous year; the number of transactions was 1,192 million, an increase of 212.99 percent over the previous year. The number of SMS customers amounted to 199.45 million, an increase of 25.91 percent.”

Of course, these Chinese banks are humungous, so it is important to find the total number of customers for each and calculate the percentages. And they are very impressive: at ICBC, 23.2 percent of customers use mobile banking; at ABC, 25.9 percent, and at CCB, 40.2 percent. As all are seeing growth of 25-50 percent per annum in mobile banking, expect the mobile percentage to be even higher next year.

Much of the credit for this boom in China is down to the banks’ efforts to make mobile banking available to all customers with a mobile browser. Chinese banks are miles ahead of most Western banks when it comes to mobile banking – many Western banks only make mobile banking available to smartphone customers, often only to iOS users. Check out the mobile Web services from ICBC, which enables enables customers to check/manage accounts, make transfers, pay bills, apply for loans, trade stocks, exchange currency and make donations to charity. The CCB mobile site offers a raft of services also.

US banks: great progress in mobile banking

Graph shows: forecasts for mobile banking in the US, by Javelin Strategy and Research: 2012 68 million; 2013 95 million; 2014 108 million; 2015 119 million; 2016 130 millionMobile banking is taking off in the US with 95 million users in 2013 – up 40 percent from 2012, according to Javelin Research (March, 2014). It is predicted to hit 149 million users by 2018.

Judging by the annual/quarterly reports, the top three US banks are taking full advantage of this surge in mobile banking, both at home and in their overseas territories. The numbers are much smaller than the Chinese banks, but these are smaller institutions in terms of total customers, and the proportion of mobile bankers is growing strongly.

JPMorgan Chase (JPM) boasts the largest number of mobile banking customers in the US with 16.4 million (Q1, 2014), followed by Bank of America (BofA) with 14.4 million (Q4, 2013) and Wells Fargo (WFC) with 12.5 million (Q1, 2014). As a proportion of total customers, BofA is the top perfomer, with 28.8 percent – which betters some of the Chinese banks – while WFC has reached 17.9 percent (a total customer number for JPM was unavailable). For all three, mobile banking is approximately half the online banking customers.

“Mobile banking continued to be our fastest-growing channel with 12.5 million active mobile customers up 23 percent from a year ago,” Tim Sloan, senior executive vice president, WFC, told investors in the Q1, 2014 earnings call.

It is clear from the annual report, that mobile is also important to Citigroup, but the report omits to give us an actual number for mobile customers.

As with the leading Chinese banks, the American leaders offer an array of services across multiple mobile channels – mobile Web, SMS, and apps for Android, iPhone, BlackBerry, and Windows smartphones. For details, see: WFC, BofA, JPM. These efforts to provide mobile banking to all customers, whatever their mobile devices and in the manner of their choosing, surely contributes to the mobile-banking success story at all three banks.

However, all banks should continue to improve their mobile offerings, ccording to Javelin Research

“Further work needs to be done to increase the ease of use of mobile banking and widen the feature set – as only about half of tech savvy consumers strongly believe that their mobile banking app gives them access to all their banking needs,” said Mary Monahan, Javelin Strategy & Research.

European banks – slow off the mark with mobile banking

The three European banks in the big 12 have the lowest number of mobile banking customers – by far. They still have millions of mobile customers, which might be impressive on face value, but not when compared with their huge customer bases or with the progress made by banks in the US and China. Both investors and company boards should be asking some searching questions.

According to the annual reports, HSBC (UK) has 2.5 million mobile banking customers, which is only 4.2 percent of HSBC’s 60 million-strong customer base. Note: the only number available for HSBC is app downloads, so actual number of active mobile users could be considerably less. Banco Santander (Spain) has 2.6 million mobile customers, which is only 2.4 percent of Santander’s 106.6 million customer base. BNP Paribas (France) has 1 million mobile banking customers – 821,000 in France and 223,000 at its US subsidiary BancWest – but the total number of customers is unavailable, so it’s not possible to find out how significant (or not) mobile is to BNP Paribas.

It’s not that Europeans don’t have an appetite for mobile banking – forecasts for mobile banking in Europe are large – larger than (Javelin’s) forecasts for the US, in fact: Forrester Research (May 2014) estimates that there were 42 million mobile phone banking users and 19 million tablet banking users in 2013, rising to 99 million and 115 million, respectively, in 2018.

So why are Europe’s biggest banks only picking up a fraction of Europe’s mobile banking business? Is it because they have simply been slow to react to customer demand and/or is it because their mobile offerings lack the multi-platform, multi-handset approach of the leading Chinese and US banks?

• HSBC only launched its global mobile banking app in September 2013. The app only works with iOS and Android phones; for all other handsets, there is a mobile Website, but this only allows limited services compared to the HSBC’s native app or PC site… and it compares very badly with the mobile sites of the Chinese banks ICBC or CCB.
• Santander, similarly, only offers apps for iOS and Android – the latter was only introduced in mid 2013. For all other handsets there is a mobile site that allows checking accounts and transfers, but only to payees who have been paid previously via an alternative channel.
• For BNP Paribas much of its mobile strategy appears to be centered a new mobile-centric banking subsidiary, called Hello bank!, which was launched from May 2013 in European markets. Top of the Group’s strategic priorities is expanding Hello bank! to 1.4m customers by 2017. Hello bank! is currently only available to people with iOS or Android smartphones.

Mobile banking customers at the top 12 global banks
Forbes
rank
Bank HQ location Mobile banking
customers
annual mobile
growth
Online banking
customers
Total
customers
Mobile percentage
of customers
1 Industrial and Commercial Bank of China China 100 million + 49.5% 390 million 432 million 23.2%
2 China Construction Bank China 117 million 38.9% 150 million 291 million 40.2%
3 Agricultural Bank of China China 83.0 million N/A 110.9 million 320 million 25.9%
4 JPMorgan Chase USA 16.4 million 24% 35.0 million N/A N/A
8 Wells Fargo & Company USA 12.5 million 23% 23.8 million 70 million 17.9%
9 Bank of China China 52.1 million 24.6% 101.1 million N/A N/A
13 Bank of America USA 14.4 million 19.8% 30.0 million 50 million 28.8%
14 HSBC Holdings UK 2.5 million N/A N/A 60 million 4.2%
16 Citigroup USA N/A N/A N/A 100 million N/A
24 BNP Paribas France 1 million N/A N/A N/A N/A
37 Mitsubishi UFJ Financial Japan N/A N/A N/A N/A N/A
43 Banco Santander Spain 2.6 million N/A 11.6 million 106.6 million 2.4%
Source: Banks 2013 annual reports
Except JPM and WFC: Q1 2014 report.
© mobiThinking

What’s happening outside the big 12 with mobile banking?

Few of the banks outside the big 12 reveal numbers of mobile banking customers, though many do discuss mobile initiatives in their annual reports. Notable exceptions include:
Sberbank (Russia), ranked 58 by Forbes, which has 14.9 million mobile banking customers in December 2013, up 60 percent from the previous year. Notably this is one of the few banks that has more mobile bankers than online bankers – 9.2 million in 2013. However, it appears users of SMS services are included in this figure, which number over 13 million, while mobile app users are over one million.
ANZ (Australia), ranked 75 by Forbes, claims 1.1 million active users for its goMoney mobile banking app.

Other banks reveal insights into mobile activities, though fall short of providing a number for mobile banking subscribers. Of particular note are:
Commonwealth Bank (Australia), ranked 49 by Forbes, remarks that 70 percent of NetBank logins come via mobile device.
Banco Bradesco (Brazil), ranked 63 by Forbes, reports that over 800 million transactions were performed via mobile devices in 2013, up 130 percent from the previous year. This has been helped by the introduction of free Internet access for Bradesco Mobile transactions for prepaid and postpaid mobile subscribers, in a groundbreaking deal with Brazil’s top mobile carriers: Vivo, TIM, Claro and Oi.
Bank of Communications (China), ranked 65 by Forbes, reports that customers made 62.8 million mobile transactions, up 232 percent from the previous year, worth RMB 878.1 billion (US $140.9 billion), up 61.6 percent from the previous year. In 2013 mobile banking customers of the Bank increased 81.5 percent, though, unfortunately, no number is provided.

Banks with no mobile banking customer numbers

Despite searching the annual reports and earnings transcripts, mobiThinking was unable to establish the number of mobile banking customers at the following institutions. It is evident that some of these companies are making progress with mobile, but perhaps not enough to share actual mobile numbers. We expect more banks to include mobile banking numbers in the 2014 or 2015 annual reports, as the numbers improve… or as investors start to ask the right questions.

• Citigroup (USA) • Mitsubishi UFJ Financial (Japan) • Itaú Unibanco (Brazil) • Commonwealth Bank (Australia) • Royal Bank of Canada • Sumitomo Mitsui Financial (Japan) • Goldman Sachs Group (USA) • Westpac Banking Group (Australia) • Banco Bradesco (Brazil), • Bank of Communications (China) • National Australia Bank • TD Bank Group (Canada) • UBS (Switzerland) • Credit Agricole (France) • Bank of Nova Scotia (Canada) •

If any of these banks would like notify us with their mobile banking numbers, please contact Andy Favell on editor(at)mobiThinking.com.



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