Wells Fargo could lose 30% of its customer base – study

by Ryan Smith27 Oct 2016
Wells Fargo has endured weeks of backlash following revelations that it opened 2 million unauthorized customer accounts – but the fallout from the scandal may only get worse from here, according to a new study.

The banking giant has already paid $185 million in penalties and lost its CEO, John Stumpf, as a result of the scandal. However, the reputational damage the bank has suffered may be even worse, CNBC reported.

According to a study released by management consulting firm cg42, Wells Fargo stands to lose $99 billion in deposits and $4 billion in revenue. Its customer base could shrink by up to 30%, and about 14% of its customers are actually predicted to switch banks, CNBC reported. That’s a risk level cg42 called “dramatically higher” than one would expect to see at any of Wells Fargo’s competitors.

“While the lion’s share of Wells Fargo customers we surveyed had not directly reported being affected by the scandal, it didn’t matter,” cg42 founder Steve Beck told CNBC. “The breach of trust the scandal created has fundamentally changed the way that they think about their institution, the way they think about their bank.”

Read more: But customer distrust of Wells Fargo is apparently nothing new. Indeed, cg42 found that concerns over cross-selling by the bank started long before the scandal broke.

“Dating back to 2011, customers have consistently over-indexed on the frustration of being sold products they didn’t need or want,” Beck told CNBC. “What the scandal has brought to life is that that wasn’t just solely based on a culture that pushed for cross-selling and upselling. But it went further than that.”

The bank is currently in damage control mode. In a speech earlier this week, newly minted CEO Tim Sloan apologized to employees for “the pain” they suffered as a result of the scandal and admitted that the bank wrongly placed blame for the scandal on low-level employees.

“Many felt we blamed our team members,” Sloan said. “That one still hurts, and I am committed to rectifying it.”


  • by Vicki | 10/27/2016 2:07:53 PM

    Well, Timmy, nothing says loving like CASH....that, or a free day of PTO....

  • by Eliud Gautier | 10/27/2016 2:51:05 PM

    But to put salt on the wounds of the American public, while this information above was coming to light a couple of weeks ago, more devastating information was revealed. Wells Fargo violated the Service Members Civil Relief Act by repossessing the vehicles of active duty service members abroad, and even filing court action against them while they were protecting us. This shameful action is only the tip of the ice burg demonstrating the depraved attitude against American values. Therefore, even though I currently enjoy the services of WF, I am seeking to jump ship as soon as my wife and I agree the direction of our banking because this is not unique to WF.

  • by Lorren | 10/27/2016 4:18:47 PM

    Hi, and i just want to share my experience with everyone. I have being hearing about this blank ATM card for a while and i never really paid any interest to it because of my doubts. Until one day i discovered a hacking guy called Leonard. he is really good at what he is doing. Back to the point, I inquired about The Blank ATM Card. If it works or even Exist. They told me Yes and that its a card programmed for random money withdraws without being noticed and can also be used for free online purchases of any kind. This was shocking and i still had my doubts. Then i gave it a try and asked for the card and agreed to their terms and conditions. Hoping and praying it was not a scam. One week later i received my card and tried with the closest ATM machine close to me, It worked like magic. I was able to withdraw up to $6,000. This was unbelievable and the happiest day of my life. So far i have being able to withdraw up to $78,000 without any stress of being caught. I don’t know why i am posting this here, i just felt this might help those of us in need of financial stability. blank ATM has really change my life. If you want to contact them, Here is the email address (atmexperts@yahoo.com). And I believe they will also Change your Life


Is TILA-RESPA a good or bad thing long term?