Wells Fargo Bank Scandal | Human Resource Management
Wells Fargo is an American multinational financial services company headquartered in San Francisco, California. It is the 2nd largest bank by market capitalization and 3rd largest bank in the United States by total assets.
Wells Fargo scandal
A recent widespread scandal at Wells Fargo shocked the corporate world. About 5,000 salespersons of Wells Fargo created 2 million fake customer accounts So, that they can accomplish highs sales goals that are set by the sales leadership.
Wells Fargo wants to accomplish its high sales target. There sales leadership pressurize sales employees to complete their unrealistic and outrageous sales targets. Sales employees don’t want to lose their jobs So, that they took illegal and unethical ways and create a fake account of the customers who didn’t want or need them due to the high pressure of the sales leadership. Regulators found that the company:
➢ Overcharging small businesses for credit card transactions by using a ‘deceptive’ 63-page contract to confuse them.
➢ The company also charged at least 570,000 customers for auto insurance they did not need.
➢ The firm admitted that it found 20,000 customers who could have defaulted on their car loans from these bogus actions.
➢ The company also had created over 3.5 million fake accounts attributed to customers who had no knowledge of such accounts.
Lawsuit on Wells Fargo
According to a 2015 lawsuit filed by the city of Los Angeles, Some Wells Fargo bankers impersonated their customers and used false email addresses like email@example.com. The “abusive sales practices” claimed in a lawsuit that Wells Fargo sales employees created 3.5 million fake accounts for customers who didn’t want or need them in May 2002. Wells Fargo is awaiting final approval to settle that case for $142 million. In 2015, the lawsuit confirmed that Wells Fargo sale employees created 3.5 million fake accounts that the customers didn’t want. The CEO and Management team was fired and their millions of dollars withheld from the payment.
Office of the Comptroller of the Currency (OCC)
Office of the Comptroller of the Currency (OCC) and CFPB (Consumer Financial Protection Bureau) imposed a $1 billion fine on Wells Fargo for consumer-related abuses regarding auto loans and mortgage products. They enforce the company to take action to prevent future abuses such as and including “imposing business restrictions and making changes to executive officers or members of the bank’s board of directors.
New President of Wells Fargo
Tim Sloan becomes the new president of Wells Fargo. A new HR Manager (Kim David) was also hired to transform the bank into a better bank. Tim Sloan stated:
“What we’re trying to do, as we make a change in the company and make improvements, is
not just fix a problem, but build a better bank, transform the bank for the future.”
Strategies To Transforming Wells Fargo Into Better Bank
As a part of Kim David’s HR management team, I will suggest the following key strategies to make improvements in the bank to build a better bank and transform the bank for the future. These strategies will help Kim David (HR Manager) to accomplish the task assigned by Tim Sloan. The required steps are given below:
➢ Training Employees
Wells Fargo company should provide their employees proper education and training on regular basis to improve their skills. If they have high skills, they can generate more customers and achieve their target sales goals. I will help the company to progress. They should have training on monthly basis.
➢ Realistic Sales Goals
Setting realistic sales goals is very important for a company. Our sales leadership should set such kind of goals that can be achievable by sales employees. If they set unrealistic and outrageous sales targets, the sales employees may choose an illegal and unethical way to achieve the sales goals. Proper sales goals encourage the sales employees to work hard to achieve the goals in an ethical way.
➢ Bonus & Incentives to the employees
Bonus and Incentives should be given to the employees, it will encourage them to work hard as achieving the
goals of the company. I will also motivate them and the financial benefits lead the employees loyal towards the
company. But In this particular case, it is different from others. Wells Fargo company was past involved in cheating and
fraud So, the incentive should not be given to the sales employees on the basis of account creation. It will help the
company to prevent illegal account creation. Some other standards are defined for the incentives.
➢ Regain Customers Trust
Wells Fargo company was past involved in cheating and fraud. Some this breaks the customer’s trust in the Company. Our main goal is to regain the customer’s trust. Some of the essential steps to regain customers trust are:
✓ Offer Excellent Customer Service
✓ Ask for Feedback & Communicate More
✓ Always Put Your Customers First
✓ Be Transparent & Create Loyalty Program
✓ Socially Active
✓ Always be available
✓ Improve your security
➢ Business Restructuring & Replacing low margin area’s
Replace business areas where there are low margins of profitability with a more cost-effective and profitable area of the bank. I will increase the profit of the Wells Fargo company. We should have to restructure it because of the past cheating and fraud in the company. I will find the gaps in the company. We can fulfill these gaps and plan accordingly.
➢ Provide better Customers Experience
Customer experience is key for a business to become successful. Wells Fargo should provide a reliable and convenient customer experience. So, more customer attracts to the company, and the profit increase. Some of the essential steps to regain customers trust are:
✓ Create a clear customer experience vision
✓ Emotional connection with your customers
✓ Regular real-time customer & employee feedback
✓ Better attractive and easy to use design for mobile banking and ATM.
✓ IOS & Android application for mobile banking
✓ Offer Quality and Attractive packages
✓ Easily accessible & 24/ services
✓ Provide them flexibility and keep one step ahead of other competitors
➢ Provide various ways to interact with the bank
Provide customers with different ways for the customer to interact with the bank. Cost-effective ways should be adopted by the bank. It makes ease to the customers So; they attract towards the company. For Example, making a website for the bank, contact/service centers, social media platforms, mobile banking, and ATM.
➢ Mentor Your Employees
Make a proper team that mentors your employees So that they don’t involve in any kind of illegal or unethical activities. If anyone found involved in such activities should be reported to the higher authorities. It will improve the company’s reputation, honesty, trust, and integrity. In that way, the security of the company will improve which is the main goal of Wells Fargo company because previously, it was involved in fraud.
➢ Latest Equipment
Our employees should have the latest and up-to-date equipment. It will make us one step ahead of other competitors. We should have an HR and it has to be updated. All employee leaves, Salary slips, bonuses, Incentives, and other details are checks. There should be a team to check and review their performance.
➢ Security and Authorization
Wells Fargo company was past involved in cheating and fraud because there is not security and authorization system. Sale employees can easily cheat the system and create fake accounts. A proper access control system is developed to increase the security of the system as well as authorization rules should also be defined for the employees and the customers. Only the authorized person can have access to the system.
➢ Maintain Check & Balance
There must be a proper check and balance of employees as well as for the customers in Wells Fargo company. Every activity should be monitor. They should check and communicate more with their customers through emails, calls, or any social media platform and check rather they create a bank account or not. A proper report should maintain about the activities performed and deliver to the higher authorities.
➢ Define Proper Rules
The company should have rules which all employees and customers must follow. If someone breaks the rule it should be punished accordingly. It will make our employees aware of our strategies that If they perform an illegal or unethical activity, they should be punished. It will provide loyalty to the company.
➢ Professional Recruitment Team and Plan
Our recruitment team should be knowledgeable, skills, and professional. They should know how to organize and select the best person for the job. They should be highly qualified and experienced. They must have a proper recruitment plan to follow. They directly affect the performance of the company. Finest recruitment plan will improve the profitability as well as the performance of the bank.
➢ Well Defined HR Policies
HR is very important for a company. They should have well-defined and strong HR policies. HR management must have a clear vision. The policies should update with changing markets and should be effective. They must be applicable. The HR team should brainstorm ideas and together prepare a well-defined policy.
➢ Effective Marketing Plan
There must be an effective marking plan for the Wells Fargo company. There should be a proper marketing team. This team controls the social media marking. All kinds of advertisements can be helpful for the business. The email should be sent to the customers about their latest packages and details. They should have proper social media account for all social websites like Facebook, Twitter, Instagram, etc.
➢ Competitors Analysis
They must analyze other competitors and plan accordingly. They should always be one step ahead of other banks. I will attract more customers. They must have proper competitor research.
➢ Quality Attributes
Quality Attributes affect the performance of the company. In order to have more customers, you should have a better performance than others. Some of the quality attributes are even below:
✓ Portability & Flexibility
Conclusion of Wells Fargo Scandal
There is a mass fraud that happens in Wells Fargo company in 2016. Fake account created of the customer that don’t who didn’t want or need them. There are about 2 million fake accounts. They were Overcharging small businesses. Soon they were accused by the Consumer Financial Protection Bureau. They were fined $1 billion by OCC. The company fired the CEO and management and millions of dollars were held from their pay. Tim Sloan becomes the new president of Wells Fargo. I as an HR manager suggest the above-mentioned strategies.
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