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Introduction

The management of Wells Fargo & Co (WFC), a US-based banking and financial services company, suffered the biggest setback in its history on February 02, 2018, when the Federal Reserve (Fed) of the United States prohibited the company from expanding its operations until the issues surrounding the opening of fake accounts were resolved. The Federal Reserve forbade the bank from taking any move that would increase the value of its assets over what they were in December 2017 (at US$ 1.95 trillion).

VIOLATIONS

As part of the Gr-eight Initiative, all bank staff were assigned cross-selling goals. Every branch was assigned daily sales objectives, and they were expected to sell a specific number of items to specific consumers. The shortfall was added to the next day's objectives if the branch failed to meet the targets on any given day. Employees were rewarded with 15-20% bonuses if they met their goals. All of the branches were evaluated based on sales data, including cross-selling, and the scorecards that ranked the branches based on these criteria were updated on a regular basis.

TOXIC WORK ENVIRONMENT

The firm has an ethical program in place, as well as a policy for whistleblowers. Anyone who was worried about the situation may call a hotline and alert senior project management assignment help of any infraction committed by employees, even supervisors. There was a system dubbed "We want to hear from them" that workers could utilize to voice any concerns they had about company practices or operational processes, and whistle-blowers' interests were properly protected.

UNETHICAL PRACTICES

According to a complaint filed in 2011, district managers were meant to conduct four daily review meetings to assess the performance of each branch and its workers. At 11 a.m., 1 p.m., 3 p.m., and 5 p.m., meetings were conducted. The meetings were held to track daily sales objectives on an hourly basis in order to keep staff engaged while also putting them under pressure to accomplish the day's goals.

CORRECTIVE MEASURES

The CFPB issued the first order for action against WFC, after which the management agreed to pay the appropriate compensation to the consumers. The Senate and the House of Representatives summoned Stumpf to testify.

THE AFTERMATH

Shearman & Sterling, an outside law firm, was then engaged to undertake an independent inquiry into the situation. Stumpf was ordered to hand up US$ 41 million in unvested equity that had been given to him. Carrie Tolstedt, the chief of retail banking, has been ordered to give up US$ 19 million in unpaid stock awards. While the inquiry was underway, Stumpf also agreed to sacrifice his pay. On October 2, 2016, he eventually resigned.

Swot analysis of Wells Fargo-

WELLS FARGO: STRENGTHS

BRAND VALUE

Wells Fargo's net worth, or market capital, was estimated to be 176.53 billion USD in April 2021. According to Forbes' rating, it is ranked 98th among the World's Best Banks in 2021 and 72nd among the Just Companies in 2021.

SERVICE PORTFOLIO

Wells Fargo provides a variety of services in order to meet the demands of a wide spectrum of customers. The bank provides services such as investing, internet banking, merchant services, insurance, loan, banking, and many more in three primary categories: personal, small industries, and corporate.

WELLS FARGO: WEAKNESSES

RISING PRICES

Wells Fargo has been the subject of several lawsuits, with the bank having to pay billions of dollars in penalties and settlement money. Many opponents believe these are the result of the company's own self-inflicted wounds. They have, however, raised the bank's operating costs and had a significant influence on its profitability.

SCANDAL OVER FAKE ACCOUNTS

Employees at Wells Fargo created fictitious accounts for millions of clients without their knowledge in order to meet a sales objective in 2016. The bank had no choice but to pay a settlement fee of $3 billion.

WELLS FARGO: OPPORTUNITIES

EXPANSION OF THE BUSINESS INTO SMALLER TOWNS

Wells Fargo often has locations in major cities. Now is the time for the firm to shift its emphasis to smaller markets and begin delivering services in smaller towns. It would assist the financial assignment help firm in expanding its consumer base.

MARKETS IN THE PROCESS OF DEVELOPMENT

As we all know, Wells Fargo has 13 offices spread over Europe, the Middle East, and Africa (EMEA). Outside of the United States, the bank does not offer small business or retail banking services. To take advantage of growing market development, the firm should now extend its service operations in Asian and African countries.

WELLS FARGO: THREATS

COMPETITORS

In the C&I loan business, Wells Fargo's primary competitors are Bank of America and JPMorgan. However, in recent years, the retail and SME banking market has grown extremely competitive. Competitors' rising power poses a serious danger to the firm.

INVESTIGATION

The government's banking regulators are conducting a comprehensive investigation into Wells Fargo's allegations of misconduct. It alleged that the business just delivered a small portion of the government's PPP. That's why they're analysing and evaluating the company's whole business.

Pestle Analysis of Well Fargo-

Political Factors: Wells Fargo

  • Political stability and the role of Money Centre Banks in the economy of the country.
  • Military invasion
  • The extent of corruption, particularly in the financial industry.
  • Government bureaucracy and meddling in the Money Centre Banks business.
  • Contract enforcement for legal framework

Economic Factors: Wells Fargo

  • Economic system in operating nations – what sort of economy is in place and how stable it is.
  • Intervention by the government in the free market and related financial issues
  • Exchange rates and currency stability in the host nation

Social Factors: Wells Fargo

  • Population demographics and skill level
  • In society, there is a class structure, a hierarchy, and a power structure (gender roles, social conventions etc.)

Technological Factors: Wells Fargo

  • Wells Fargo & Company rivals' recent technology advances
  • Technology's influence on product offerings
  • Impact on cost structure in the Money Centre Banks industry

Environmental Factors: Wells Fargo

  • Weather
  • Climate change
  • Laws related to environment pollution

Legal Factors: Wells Fargo

  • Employment law
  • Health and safety law
  • Data Protection
  • Consumer protection act and e-commerce act.

 

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