Transparency took a left hook to chin yesterday when Wells Fargo & Co. chose to withhold a crucial piece of its financial data.
Specifically, Wells Fargo for the first time in at least two years refused to disclose the exact number of its active mobile banking users. Instead, Wells Fargo went with a ballpark count.
In Wells’s second quarter earnings report, the San Francisco bank disclosed that it had “nearly 16 million” active mobile users. In the first quarter, Wells disclosed that it had 14.9 AMUs. In the second quarter of 2014, the count was 13.1 million.
Obviously, “nearly 16 million” is anything but specific, and implies a quarterly growth rate that could be as low as 4% or as high as 7.4%.
The implication behind the refusal to release an exact count (“No, there is not a more specific number to share,” a Well assistant vice president of corporate communications told us.) is that the exact number of AMUs is less “material” than it was in the first quarter, and all the quarters previously. The Securities and Exchange Commission requires disclosure of “relevant business and financial information” to potential investors. Was the number of active mobile users at Wells Fargo less relevant or “material” in the second quarter than it was in the first?
It is difficult to answer “no” to that question. John Shrewsberry, Well’s CFO, said during yesterday’s earnings call that Wells Fargo’s “omni channel” approach is what creates the bank’s “magic”:
[W]e are also not shrinking our store count and we have found that, in our omni-channel distribution, where you have stores or locations, ATMs, phones, online and mobile — it’s the magic of all those working together. And that’s a very strong compelling value proposition for our customers.
Mobile, of course, is a major Wells banking channel.
Further, as evidenced by the Fiserv video released yesterday and appearing below that features my friend Steve Shaw, the technology company’s vice president, strategic marketing in its Digital Banking Group, many in the industry view mobile as central to the banking ecosystem today, not just as a component among many.
This is not to say WFC violated any SEC regulations, just that questions about Wells Fargo’s performance and future prospects got a bit more pointed without the data on the bank’s mobile users. Or in the words of one securities attorney, Wells’s information is less “instructive.” Which AMU growth rate is right? What does a more modest AMU growth rate mean for WFC’s future?
I wish I had the answers to those questions. Don’t you?