After the problems surfacing about the fake accounts and sales scandal, swift actions from Wells Fargo & Co (WFC.N) respective shareholders are planning to start anew and board the train to a better direction before the year ends. Under the new management of Tim Sloan, the enormous banking company seeks for a positive future.
After debunking the fraudulent accounts scandal, the resignation of CEO John Stumpf adhered accompanied by the surrendering of more than $40 million unvested stock. After all the diminishing revenue which is around $8 billion in total, Wells Fargo with its 4 shareholders actively voiced out the reform and rehabilitation of the banking company on recent reports today.
The scandal’s disastrous aftermath
The incident shook the banking giant to its core, a whopping declination of 17% in deposits; that is a stunning 9% lower in contrast to last year’s revenue. Apart from the financial deterioration, internal problem and external problem broke the well maintained image of the colossal banking company. As Wells Fargo’s stature crashes, the bank’s investors come jumping out of its derailing train as swiftly as they could.
Now, the team needs to bandage and salvage what is left. The lessening of the financial risk and reputation risk is the right step towards the right direction for the company. A separate risk committee, and corporate responsibility committee is in charge for overseeing the company’s struggling reputation.
However, after the recent quarters, Wells Fargo posted an increase of 2% to $22.3 billion compared to the preceding year, whilst deposit thrived by $30.4 billion in contrast to the prior quarter.
Just after the incident happened, Wells Fargo subdued any possible threats by taking actions such as the launching of internal probes, apologizing to customers and employees, changing the compensation plan and hiring a consultant to review sales practices as precautionary measures.
Reckoning early this month is the commencement of different variations of plans. The new CEO Tim Sloan noted that they would look into everything and take every possible course of action they can; this is all to repress the slightest mistake of making the same mistake twice and not taking the past as a recursive lesson.
The Banking giant also announced today a partnership with SigFig as the production for the robo-adviser finds its way to modern day banking. An expected beta will emerge around the first half of 2017.
Expensive human advisers are soon to be dispersed as the robo-adviser will manage everything under their given algorithm. This is a service to cater for investors, guiding them on the process and conveying financial advice and walkthroughs for both the old and the new alike.
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