Bank Regulation

Wells’ Growth Reportedly Hampered By Old Systems, Tech Failures

Wells Fargo is striving to revamp its approach to technology to ensure systems stay online, satisfy regulators and block cybercriminals, the Wall Street Journal (WSJ) reported on Saturday (Jan. 11).

Following the 2016 incident of bogus accounts, regulators have been watching the bank closely and have handed down edicts that Wells Fargo has had trouble meeting due to obsolete methods and resources, past and current personnel told the WSJ.

The firm’s main operations were hampered by trouble handling everyday challenges such as supervising workers’ wages and creating a fresh channel for financial advisers.

“We need to be a technology company,” Charles Scharf, CEO, said in his first meeting with employees after taking the job in October, the WSJ said. 

Saul Van Beurden, head of technology who is also a newer hire, said in an interview that he has prioritized addressing regulators’ concerns, hiring top talent and ensuring systems stay online.

He said repairing problems pointed out by regulators is his “first priority.” Van Beurden came to Wells Fargo in April from JPMorgan Chase and reports to Scharf. 

 When “the app is down, the bank is down for our customers,” he said.

Although Wells Fargo contends that in the 1990s it was the first U.S. financial institution to offer digital banking, it has trailed behind, current and former employees told the news outlet.

Mark McAllister, a 2014-19 project manager, said the bank struggled with organized reporting, whereas regulators had expectations regarding meticulous records. For example, the necessary records for Apple Pay were often non-existent, probably due to manual processes.

The Office of the Comptroller of the Currency advised Wells Fargo to overhaul its human resources and technology systems. The agency especially had issues with the bank’s manual processes for supervising pay and performance for its 260,000 employees, a source familiar with the matter told the WSJ.

Last month, Wells Fargo hired Scott Powell to be its new chief operating officer and serve on the bank’s operating committee. Powell is the former Santander head executive. 

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