Wells Fargo is a multinational financial services provider headquartered in California. With a host of services in various domains of financial consulting, investment broking and banking, Wells Fargo has grown immensely in the last few decades to become the world’s second-biggest financial services company in terms of market capitalization.
The company operates primarily in four domains of finance namely – Community Banking, Wholesale Banking, and Wealth and Investment Management. In addition to this, the company also offers retail banking services, commercial banking, and corporate banking in multiple locations as well as online services across the world.
The company caters to three primary segments such as personal, commercial, and small industries. In the US where it has it the strongest network, the financial services provider has around 13,000 ATM’s and 6000 banking stores making it the second largest player in the region.
Strengths in the SWOT analysis of Wells Fargo
The following are the strengths of Wells Fargo :
- Segment-specific offerings: The company caters to three key segments namely personal, commercial, and small industries and has specific services to offer to each of them. For their retail customers falling under a personal category, the Company list of services includes banking, loans and credit, insurance, investing and retirement, wealth management, and rewards and benefits. Under the commercial segment, Wells Fargo offers loans, insurance for the owner as well as assets, credit facilities, merchant services, Online banking services, round the clock customer service etc. Under the small industries segment, their line of services includes banking, loans and credit, merchant services, insurance, and payroll and other services.
- Business Philosophy: The business philosophy of the company Wells Fargo is centered around five core values which are the basis for everything that the financial services company does. These values are string customer focus, consideration of people are the biggest source of competitive advantage, highest standards of ethics and transparency, diversity and inclusion and leadership.
- Acquisitions: One of the core strengths of Wells Fargo is the series of regional acquisitions that it has made. Some of these include the 1998 merger between Wells Fargo and the Norwest Corp., headquartered in Minneapolis, the buyout of East Coast giant Wachovia in 2008 etc. These acquisitions increased their customer base in the US to almost 70 million.
- Customers across income groups: Wells Fargo has customers from all income groups. While the economy customers avail services such as credit cards, bank accounts, loans etc. the higher income segment looks at services such as wealth, brokerage, and retirement services. Wells Fargo also offers services such as financial support services, taxation services, and underwriting services.
- Wholesale and retail banking: The financial services provider Wells Frago takes up wholesale banking services like equipment financing, crop insurance, energy syndicated loans, commercial real estate etc. The company also takes care of retail banking function like bank loans, credit, and debit cards,
- Community Banking Services: Wells Fargo has community banking services like credit cards, bank accounts, debit cards, account management, loans etc. Though it may seem regular community banking constitutes one of the most profitable divisions of the bank.
Weaknesses in the SWOT analysis of Wells Fargo
Some of the key weaknesses of Wells Fargo are:
- Customer Relationships: There have been allegations that Wells Fargo though claims to be customer-centric, treats higher income customers differently from lower incomes customers.T he lower income group often suffers because of this reason.
- Bank Scandal: Wells Fargo is still facing the aftermath of the scandal of fake accounts and fraudulent transactions. Following the scandal, many long-standing customers shifted to other banks and the bank suffers the loss of face primarily because of loss of trust.
- Higher costs: Wells Fargo had expanded a lot in the last decade and this expansion was a costly affair. The bank also faced a lot of costs in its operations across various financial domains. In addition to this, there was also a lot of legal charges and other related costs related to the scandal and its management.
Opportunities in the SWOT analysis of Wells Fargo
- Growth in smaller towns: Wells Fargo is primarily in cities and most of its operations are in the USA especially in banking. The company should look at a market outside the US like China or India which are registering steep economic growth as well as taking huge strides in financial reforms.
Threats in the SWOT analysis of Wells Fargo
Some of the threats include:
- Competition: The main competitors of Wells Fargo are Citibank, Novo Scotia Bank and Bank of America
- Financial unrest: The world over is facing critical financial crunch and there has been major ups and downs in the financial services market. This will affect the operations of the bank in the long run.