Bank of America Banging It in Mobile

Bank of America Corp. earnings today offered some positive signs, but to us, none were as positive as the bank's massive increase in mobile banking. BofA said today that its mobile banking customers grew 45% in 2011 to 9.2 million by the end of the fourth quarter.

But if you think about BofA's mobile growth as a share of its online banking customer base, the year-over-year increase is more impressive. BofA says it has about 29 million active users of its online banking platform today. At the end of 2010, BofA had 6.3 million mobile banking users, or about 22% of its online banking user base was mobile. By the end of last year, that share was up to approximately 32%.

And there remains some significant runway available to BofA in mobile banking. While we presume that about 20 million users of BofA's online banking platform could conceivably migrate to mobile (although the bank will never get a 100% mobile adoption rate), BofA's consumer and small business "relationships" number 57 million today. At least a fair portion of those consumers and small businesses are primed for the mobile channel.

The bank's small business base, in particular, seems to me to be a linchpin. By the end of last quarter, BofA expanded its team of locally based small business bankers to 600 from less than 100 in 2010. And BofA stated today that it plans to expand its small business banking team to 1,000 in 2012. Considering that already BofA is on a march in small business loan originations, which climbed 20% last year (I'm trying to find the actually dollar amount of small business loans outstanding within the BAC earnings report -- not easy), mobile might eventually find greater growth at BofA from its small business customer base.

Online banking is showing signs of slowing at BofA. Active online banking accounts at BofA only increased 1.8% in 2011 to 29.9 million. While active bill pay customers increased 4.2% last year to about 15.6 million, online-only customers of BofA actually fell a slight 0.7% to nearly 14.3 million. That is not an expected trend. Well, at least BofA has its mobile channel hopping.

Tags: BAC, Bank of America, earnings, mobile, online

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Comment by Brett King on January 19, 2012 at 10:17am: Great post, some great data.

BK

Comment by JJ Hornblass on January 19, 2012 at 10:18am: Thanks, Brett.

Comment by Joey Zollinger on January 19, 2012 at 12:33pm: I noticed you used "Active" to describe the online banking users but did not use it to describe the mobile user base. Did Bank of America say they have 9.2 million "Active" mobile banking users? Did they describe how they define mobile banking users (app user, mobile site user, text banking)? I'm just curious how active all their mobile banking customers are and how they define a mobile customer.

Comment by JJ Hornblass on January 19, 2012 at 12:35pm: Joey, great question. No, BofA did not make that distinction among its mobile banking users. We'll see what we can find out, however.

Comment by JJ Hornblass on January 19, 2012 at 3:18pm: Some more data, courtesy of EMI Strategic Marketing:

Comment by Joey Zollinger on January 20, 2012 at 10:07am: Thanks JJ. These are interesting numbers. Both Wells and Chase saw a big increase in mobile adoption over the last year (55.3% and 58.5% respectively).

If we compare B of A's 9.2 million user number to their online banking users and then compare that number to Wells and Chase, then we get the following:

B of A mobile usage: 30.7% (number of mobile users compared to online banking)

Wells Fargo has mobile usage rate of 37%

Chase has a mobile usage rage of 48.6%.

I think its safe to assume the 9.2 million mobile users are probably active users - although the term "active users" is somewhat vague and each of these banks probably measures it a bit differently.