Coming off the heels of a fake account scandal that resulted in the departure of Wells Fargo CEO John Stumpf, the bank is providing an update about the impact it’s having on the business.
In a press release, Wells Fargo disclosed customer interactions with tellers declined 10 percent in October compared to a year ago. Wells Fargo said the decline was due to an increase in customers using mobile channels, which it said was up 7 percent year over year. Meanwhile, a slowdown in new account openings resulted in branch interactions declining from September of this year compared to last year.
As for new accounts opened, Wells Fargo reported a 27 percent decline in linked month (LM) accounts and a 44 percent year-over-year decline “primarily due to a full-month impact of customer reaction to the sales practices settlement and reduced marketing activities.” Customer initiated account closures were up 3 percent, both on an LM basis and year over year, the bank said. Not surprisingly, customer loyalty scores were down, with scores showing improvement from the lows in early October.
“In October, we were pleased to see that, in general, our existing customers were actively using their accounts and valued their relationships with Wells Fargo. As expected, we continued to see declines in new account openings. We remain focused on meeting our customers’ financial needs by providing great service and quality products and will provide our next update in mid-December,” said Tim Sloan, Wells Fargo’s new president and chief executive officer, in the press release.
Meanwhile, Mary Mack, head of community banking at Wells Fargo, said that the October data reflects the first full month of impact from the fake account scandal but also had one fewer business day than Sept. 2016 and Oct. 2015. Still, Mack acknowledged Wells Fargo is feeling the pain from the incident and the fine it was hit with. “We recognize we have work to do, and we are focused on strengthening our relationships with existing customers and building new ones with potential customers,” she said.