This story has been updated to include a response from Wells Fargo.
A report by a management consulting firm predicts Wells Fargo will suffer the loss of thousands of banking customers in the next year who will take with them billions of dollars in deposits.
The firm, cg42, said it performs a periodic review of the banking industry to predict customer attrition across the top 10 U.S. retail banks and analyze its financial impact to the industry.
“The results of our Wells Fargo Mini-Study paint a bleak picture for the largest U.S. retail bank and unfortunately validate the ominous findings from our 2011—2015 Retail Banking Competitive Vulnerability Studies,” cg423 said in a statement.
In that previous report, it predicted Wells Fargo stood to lose tens of billions of dollars in revenues and deposits if it didn't address consumers biggest issue. The report says customers overwhelmingly reported that Wells Fargo kept trying to sell them financial products they didn't want.
“Our focus is on restoring trust with all of our stakeholders and building a better Wells Fargo,” the company said in an email to ConsumerAffairs. “With this in mind, we have set a goal of becoming the financial services leader in customer service and advice.”
A spokesman for the bank suggested there is little evidence for cg42's predictions. On Friday morning, the bank reported third quarter revenue of $21.9 billion, slightly beating estimates.
“We are evolving our business to deliver what customers want — including innovations that help us serve them better while attracting new customers,” the spokesman said. “At Wells Fargo we are focused on enhancing customer value, delivering best-in-class experiences.”
Problems began with the scandals
The cg42 report traces the consumer unrest to Wells Fargo's well-documented scandals. In 2016, it revealed that employees had opened millions of checking and credit card accounts without customers' knowledge or consent. It was also fined for selling insurance to auto loan customers without their knowledge.
The cg42 report found an increase in the number of consumers who said they are dissatisfied with the bank. The biggest claim charged Wells Fargo engaged in “dishonest, unethical, or illegal practices.” Customers also reported the bank pushed them to agree to products and services they didn't want.
The report estimated that as many as 30 percent of the bank's customers are in risk of closing their accounts and moving to another financial institution. It said up to $93 billion in Wells Fargo deposits could be at risk. According to an analysis by CNN, that's about 7 percent of the bank's total deposits.
Separately, Reuters reports that Wells Fargo has expanded its Washington lobbying team, specifically to inform lawmakers about a number of “good citizen” efforts it has recently undertaken. The bank has been publicizing its support of programs ranging from financial literacy to care for homeless veterans.