Wells Fargo’s illegal cross-selling and fraudulent account creation practices appear to have caught up with the bank, just days after CEO John Stumpf announced his surprise resignation. As Bloomberg reports, management consultancy cg42 released a poll showing 14% of Wells Fargo customers have decided to leave the bank, “potentially withdrawing billions of dollars and crimping revenue.”
The data confirms what a separate poll by SurveyMonkey Intelligence released last week revealed. According to the survey, since the scandal broke, Wells Fargo has been losing asmuch as 140,000 of its mobile customers every week. The report finds that while the bank reported a downturn in new customer applications and accounts opened since the scandal broke, Wells Fargo curiously hasn’t reported on its customer churn rates. That is, the rate at which Wells Fargo is losing customers as they close their accounts after the scandal. (Conversely, customer retention rates would reveal the rate of customers keeping their accounts. Either metric works.)
In September, when the scandal hit, Wells Fargo Mobile download numbers dropped lower than in any other month in 2016.
Looking specifically at the 30 days after the Wells Fargo scandal broke and comparing them to the previous 30 days, downloads of the Wells Fargo Mobile app dropped by 7.7%.
The trend is bank specific: Chase, BoA, and Citi all saw a modest increase in downloads in this same time period. In fact, while Chase, BoA, and Citi saw growth within the expected range for their app downloads after the scandal, only Wells showed a significant–and negative–departure from its previous growth rat
The survey also found that weekly user retention rates averaged 79.9% in August, and had even been slightly improving in the weeks leading up to the scandal breaking, with a weekly retention rate of 80.9% for the week ending September 7. But then the Wells Fargo account scandal hit, and weekly retention rates hit a six-month low of 78.0% for the week ending October 9.
A 2.7% drop in the weekly user retention rate might not seem like much, but think about it in the context of the Wells Fargo Mobile app:
For a mobile app that has 7 million weekly active users, when the weekly user retention rate drops 2.5% from 80% to 78%, that’s an additional 140 thousand users who aren’t returning to the app from one week to the next. While some of those users might return in later weeks or months, some percentage of these hundreds of thousands of users that Wells Fargo has lost from week-to-week since the scandal began will never return.
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The good news for Wells is that this exodus has yet to be reflected in the public figures released by the bank. Last week, the bank’s new CEO Tim Sloan said that customer traffic at branches and call centers remained at typical levels in September while deposit balances rose by $6.5 billion from the previous month; Folk however declined to provide updated figures.
Still, Wells is not taking any chances and in an attempt to quell the scandal that has engulfed its consumer bank, the bank will start broadcasting nationwide television commercials Monday night, outlining steps it has taken to halt abuses.
As Bloomberg adds, “the move escalates a public-relations campaign that has featured advertisements online and in newspapers, as the firm tries to convince customers it’s putting their interests first. Authorities fined the bank $185 million last month, saying branch workers may have opened more than 2 million unauthorized deposit accounts and credit cards over half a decade.”
“The advertising reiterates Wells Fargo’s commitment to customers and the steps we are taking to move forward and make things right,” Mark Folk, a company spokesman, said in an interview. Some ads will air during Sunday morning talk shows, and the push will include networks Univision and Telemundo, he said.