A fraud scandal, its severe impact on normal functioning did not deter Wells Fargo. Through new strategies and stress on innovation, the bank is rebuilding its past glory:
Wells Fargo is the fourth-largest bank in the US, with approximately $1.9 trillion in assets. It offers it various banking services to 1 in 3 US households and more than 10% of small businesses in the country through its Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking and Wealth & Investment Management.
The bank was in a major fraud scandal controversy where it created millions of fraudulent savings and checking accounts on behalf of its clients without their consent sometime in 2016 and its aftermath had dealt a serious blow to its reputation and operations. It faced several punitive actions – civil and criminal – amounting to $2.7 billion and fine of $185 million by the Consumer Financial Protection Bureau (CFPB). The scandal led to resignations of the bank’s then CEO and several other senior managers and a new management team was installed with reformation of the bank as the prime task.
The bank is now back on a sound footing having almost erased the black chapter and effected operational changes and implemented new strategies, at the same time relying more on technology, especially AI and cloud.
RESTRUCTURING, DIGITAL STRATEGY
It has undertaken a major organizational restructuring and created a new digital strategy. Accordingly, it now has 5 line-of-business CEOs in Consumer and Small Business Banking, Commercial Banking, Corporate & Investment Banking, Wealth & Investment Management and Consumer Lending. In addition, it has created a new group for Strategy, Digital Platform and Innovation. The department is designed to enhance ‘the company’s focus on planning for the digital future and investing in the customer experience’. The bank also sees AI as a central focus for banking innovation moving forward and has stressed that digital transformation begins at the line-of-business level, requiring every department to be ‘ideating, redesigning and reimagining the experience’. However, digital is nothing new at the bank. It has some 30 million digitally active customers, which is 43% of its total customer base.
NEW VIRTUAL ASSISTANT
One recent outcome of this digital stress is the design and development of a virtual assistant to help the bank convert more retail banking customers into digital users. The virtual assistant will be deployed early next year when the bank is proposing to come out with a revamped mobile app and website. Named Fargo, it will be able to execute tasks including paying bills, sending money and offering transaction details and budgeting advice.
CLOUD STRATEGY
Wells Fargo as part of its digital strategy has also initiated a multi-cloud approach with third-party data centers to drive technological speed, agility and scalability for its customers and employees. It has engaged Microsoft Azure as its primary public cloud provider and Google Cloud as provider of additional business-critical public cloud services. With Microsoft it will use critical data and analytics services to accelerate its digital transformation, including delivering enhanced customer experiences and enabling increased employee collaboration. Google Cloud will drive advanced workloads, and complex AI and data solutions, allowing it to move faster on driving personalized experiences for its customers and clients.
The bank is also readying its mobile app, called Wells Fargo Mobile, hoping to provide its 30 million mobile active customers a new, modern look and feel and a simpler user experience using the app. The app will offer answers to the customers’ everyday banking questions and, rather than self-serving to accomplish a task, customers will be able to ask Fargo to complete the task for them. The virtual assistant will on its part provide personalized insights and recommendations to help customers better manage their finances.
WELLS FARGO LABS
Yet another unique thing the bank is initiating is its innovation department, called Wells Fargo Labs. A unique thing about the Labs is a comment box on its website, where any user can offer any suggestions or thoughts on, either the innovations being touted, or fresh ideas they may have. The bank intends to create an idea of community between the innovation team at Wells Fargo, and the users who will ultimately benefit from the initiatives if and when they are implemented.
The bank is now clear that its dark period of scandals and intrusive investigations are over. With the innovations already being put out by the Innovation Labs and those still in development, the bank is clear about its resurgence and getting back to its glorious days. As the Director of Wells Fargo Innovation Group Miranda Hill says, “It is critical for the lab to continually push the boundaries on the future of personal finance and money management. The more we motivate team members to reimagine experiences, the more successful we’ll be as an organization in redefining the future of banking.”
