NEW YORK – Wells Fargo & Co will launch a new multi-channel ad campaign, its chief executive said on Tuesday, in a further sign of the bank's efforts to regain trust after a sales scandal last year caused a sharp drop in account openings.
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The advertising campaign, to begin in mid-April, will be published across different media channels and focus on the changes the bank has implemented since it was rocked by revelations over illegal sales practices in September last year.
"For our team members and customers, we want to create a culture that's better every day," Chief Executive Officer Timothy Sloan said in explaining the new campaign to employees at a town hall meeting in Orlando, Florida on Tuesday.
"Building Better Every Day," the slogan of the new campaign, will run across broadcast and print ads, online and on the bank's mobile app, as well as on its internal channels, Sloan said.
A spokesman declined to comment on the budget for the new campaign. But following the fallout, Wells Fargo last year said it would increase marketing spending and in October 2016 launched its first nation-wide campaign to address its sales practices.
Federal regulators last year had ordered the San Francisco-based bank to pay $190 million in fines and restitution because they said its high pressure sales environment pushed employees to open 2 million deposit and credit card accounts without customers' permission.
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The bank has since unveiled a new compensation structure for its branch employees that creates incentives based on customer service rather than sales goals.
Wells Fargo, the third-largest U.S. bank, saw a sharp drop in account openings, customer interactions at its branches and an increase in account closures since the scandal.
It has since started to report on consumer activity on a monthly basis. Its latest retail business figures on Monday showed the bank is still fighting an uphill battle to regain customers.
Consumers opened 43 percent fewer checking and 55 percent fewer credit card accounts on a yearly basis in February.
"A pick-up in marketing spend should benefit account openings the next few months, but were that not to occur, then it could force us to reconsider the long-term growth potential in Wells' retail bank," Brian Kleinhanzl, an analyst with KBW said in a research note on Monday.
But other analysts said the bank hardly had a choice when it came to investing in public outreach campaigns.
"If they do spend, they get accused of wasting money," Stephen Biggar, an analyst with Argus Research, told Reuters. "But if they don't spend, they get accused of not doing everything they can to regain customers."
(Reporting by Tina Bellon; Editing by Bernard Orr)