The outlook isn’t getting any better for Wells Fargo Bank. Ever since it was revealed that employees on the consumer side of operations had been using current customer information to create fake accounts, Wells Fargo has been suffering from horrendous headlines and a drastic drop in consumer confidence.
The scandal led immediately to mass firings, but an enraged public was not the least bit mollified. Now, Wells Fargo has announced plans to make major leadership changes, hoping to begin the process of turning the PR crisis into an olive branch to disaffected customers.
Three regional managers have been fired, and at least two others have been reassigned and demoted, respectively. These decisions come on the heels of announcements that CEO Tim Sloan and several of his top executives will go without their 2016 bonuses … which proved to be delicious news for a vengeful middle class, but not good enough by their standards. Heads had to, at least metaphorically, roll. And, so they did.
At the outset, four executives with close ties to the scandal were fired, and Wells Fargo leaders changed the sales goals some called “ridiculous” and others wholly blamed for the scandal. Still, customers were not ready to accept such mea culpas. They didn’t want to see “standards” blamed for fraud. They wanted people taking the fall. Now, more have … and the company is still far from out of the woods on this one.
Wells Fargo still faces an independent investigation, that, many media sources say, will be released just prior to the annual shareholder meeting on April 25. You can bet that won’t be a happy meeting. Going in, management will need to have a strong and flexible public relations plan in place. They are likely to face a hostile room full of people demanding answers and action. The leadership will have to deliver equal parts contrition and hope in order to re-instill confidence in a badly shaken group of investors.
While the company has said little publicly, aside from confirming the firings, there’s a lot happening behind the scenes to rebuild their brand and begin the process of reconnecting with customers. This will be a tough hill to climb. Customers already have constant fears of hacking and data breaches. They don’t want to believe their bank would do the very thing they’re worried some black hat programmers are trying to do to their bank. And, yet, that’s exactly how many consumers viewed this situation. It’s an image Wells Fargo will have to shift if they plan to win back that lost trust.
William Doonan is a tax law and legal expert.