“Wells Fargo, Stuck in ‘Wait and See Mode,’ Struggles to Boost Its Businesses”

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  The article I have chosen describes the financial struggles Wells Fargo currently has. The source of these struggles stems from a 2016 sales practices scandal. Since then, two Wells Fargo CEOs have lost there jobs due to the regulatory problems (Ensign, 2019). In addition, the business lines have cut revenue in 2018. Wells Fargo’s 3 business lines are consumer banking, wholesale banking, and wealth management. This is a far cry from the bank that was once at the very top (Ensign, 2019). Just last month, the bank’s latest CEO Timothy Sloan stepped down. Wells Fargo is still having problems finding his replacement. Brian Kleinhanzl, an analyst at Keefe, Bruyette, and Woods, says that, “Without a permanent CEO the company has now moved to wait-and-see mode. [...] That is like a ship without engines in high seas” (Ensign, 2019). Even despite the recent financial crisis, Wells Fargo remained unscathed until 2016. The bank did not have to cut its costs after the crisis. Yet, Wells Fargo has a very aggressive sales and lending strategy. Branch employees were pressured to sell multiple products. The bank bought billions in General Electric stock and would start lending to non-bank lenders. In 2014, Wells Fargo profit was $23.1 billion (more than J.P Morgan and Bank of America) (Ensign, 2019). It has since fallen below the other top banks. Important metrics in consumer banking has declined; service charges falling by 15% (Ensign, 2019). 

  Wells Fargo also cannot seem to attract new customers. As wealth management head Jonathon Weiss notes, “Existing clients really love the team that they work with at Wells. If you’re a new prospect, it’s a little harder to fall in love with us right now. [...] You’re asking yourself or you’re explaining to your kids, ‘Gee, why are you working with Wells Fargo, aren’t they in the news a lot?’” (Ensign, 2019). Cuts include closing 5,600 banks, tightening budgets and layoffs. Finally, there has been internal strife w/ management and employees. Many employees did not receive raises or bonuses would fall. Despite all that has happen, Wells Fargo wealth management executives received a reorganization plan (Ensign, 2019).  This article proves how bad publicity can derail a marketing plan. The bank continues to attract new customers; showing they do not grasp Customer concept. The context of Wells Fargo has also not been utilized properly. The 2016 scandal has done tremendous damage to the bank. However, Wells Fargo has been implementing procedures that have proven to be ineffective. Wells Fargo should accept what has happened and make corrections that will not complicate business. 

Works Cited: Ensign, Rachel Louise.  Wells Fargo, Stuck in ‘Wait and See Mode,’ Struggles to Boost Its Businesses. Markets, The Wall Street Journam, Web, 9 April 2019. 9 April 2019. https://www.wsj.com/articles/wells-fargo-stuck-in-wait-and-see-mode-struggles-to-boost-its-businesses-11554802200