How Has Wells Fargo Fared Since the Fake Accounts Scandal?
It has been over a year since Wells Fargo was fined for the fake accounts scandal that affected millions of banking customers. Wells Fargo employees created 3.5 million unauthorized checking and credit card accounts over a seven year span, and the bank is still suffering the consequences.
In the wake of the scandal, Wells Fargo fired 5,300 employees and paid $185 million in fines to the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the City and County of Los Angeles. In addition, they reached a $142 million settlement last July with affected accountholders.
The new CEO Tim Sloan worked to control costs throughout 2017, but the bank’s efficiency ratio was close to 61% after the second quarter. That measures the percentage of revenue lost due to extraneous costs, and Wells Fargo’s target range is 55-59%.
New reports confirm that Wells Fargo’s total efficiency ratio was 66.2% for 2017, spiking to 76% in the fourth quarter. Sloan said that despite optimism, “We’re never going to declare victory.” He also said the costs are “unacceptable.”
In the midst of these overwhelming obstacles, Wells Fargo has searched for new innovations to rebuild customer loyalty. Last Friday, they announced support for Fitbit Pay, the fitness tracker’s first mobile wallet, currently available on the Fitbit Ionic. In October 2017, Wells Fargo enabled near field communication technology on 40% of their ATMs, allowing customers to make withdrawals using their mobile wallet. That system will be implemented in all Wells Fargo ATMs by 2019.