An internal investigation report into the practices of the Community Bank in Arizona and California proves the inner-workings of always be closing paradigm that was manipulating and also hurting their own workforce. Where the retail bank of the Wells Fargo in the states of Arizona and California had such methods of trading and selling that cheated to get to levels that the leaders set.
The employees was constant put into pressure of sales and get the highest turnover. That even the witnesses sandbagged their family members into bad accounts and deals with the bank to met the expected sales. The reality of the practices proves the vulture economics voodoo who sold duplicated accounts to costumers with no need for it.
There so many aspects of the leadership and the practices like these… shouldn’t be needed by the big-banks and affiliated like Community Bank. The Community Bank and their operation breached not only public trust, but also they manipulated their corporate practices. This report is showing how far banking management can take it!
“Aided by a culture of strong deference to management of the lines of business (embodied in the oft-repeated “run it like you own it” mantra), the Community Bank’s senior leaders distorted the sales model and performance management system, fostering an atmosphere that prompted low quality sales and improper and unethical behavior” (Wells Fargo, P: 4, 2017).
“The Community Bank identified itself as a sales organization, like department or retail stores, rather than a service-oriented financial institution. This provided justification for a relentless focus on sales, abbreviated training and high employee turnover” (Well Fargo, P: 7, 2017).
Witness report on how the Community Bank used Scorecard system:
“Witnesses recalled that bankers were encouraged to make prospect lists of friends and family members who were potential Jump into January sales targets, and often would “sandbag” (temporarily withhold) December account openings until January in order to meet sales targets and incentives. The pressure associated with the campaign manifested itself in higher rates of low quality accounts, as confirmed by the “Rolling Funding Rate,” a quality metric used by the Community Bank to track the rate at which its customers “fund” (place more than a de minimis amount into) new checking or savings accounts” (Wells Fargo, P: 21, 2017).
“The negative consequences of these regional bank-wide processes were exacerbated by management in certain regions who over-emphasized the use of sales rankings and campaigns and employed other aggressive practices. California and Arizona in particular consistently ranked among the top states for sales practice problems, in part based on sales pressure tactics encouraged by certain regional managers” (Wells Fargo, P: 22, 2017).
In Arizona:
“Multiple witnesses also said that Conboy or certain of her subordinates encouraged bankers to sell customers “duplicate accounts” regardless of actual customer need. One manager reporting to Conboy lamented that Arizona district managers “taught branch managers how to sell same day multiple account opens to customers with false customer needs”; another reported that “some Managers and Bankers feel a bit uncomfortable opening multiple DDA’s [sic] on the same day for a customer” because “it feels as though they are manipulating the sales system.” Conboy also told subordinates that they should not overemphasize quality accounts, but should manage to the Community Bank’s minimum quality standard in order not to miss productive sales opportunities; Conboy stated to one district manager that “your team should be managing within the 87.5% [Rolling Funding Rate] guideline at a store level . . . You and I have discussed the opportunity costs of 100% funded accounts . . . my direction would be to coach your stores and MPs to remain above the combined 87.5% [Rolling Funding Rate] . . . .” (Well Fargo, P: 25, 2017).
Sales Staff treatment:
“Because good performance was deemed in large part to mean meeting or exceeding sales goals, and poor performance in many instances led to shaming or worse, many employees believed that their future at Wells Fargo depended on how many products they sold. In a January 2012 email to a colleague, a Community Bank marketing leader wrote that, despite an increased emphasis on customer needs, “we consistently put more focus on solutions, we increase the solutions goals . . . the message [employees] are receiving is that Solutions continue to be king and everything else falls below that.” (Wells Fargo, P: 30, 2017).
What we can learn by this and see, is that Wells Fargo and their affiliated companies has had vulture capitalistic tendencies, where the leadership pushed their sales-team and their results with enormous profits. That the branches and leaders even misuses funding and duplicate accounts to meet the quotas needed. So the hazardous business practices did not only hurt the costumers, but also the inner works of the Community Bank and Wells Fargo. This sort of scandal should show the reasons why the government and federal institutions needs to regulate the banking industry. A banking industry that has no issues with having vulture practices if the loose regulated systems of the United States today. Peace.
Reference:
Independent Directors of the Board of Wells Fargo & Company – ‘Sales Practices Investigation Report’ (10.04.2017)
MinBane 