A year after Wells Fargo’s (NYSE:WFC) phony account scandal first broke, CEO Tim Sloan discussed what the bank is doing to rebuild trust with its customers.
“I think the next steps are to continue on the plan that we set about a year ago: very focused on fixing anything that was broken, inviting third parties from the outside to help us look at the company very critically, continuing to remediate our customers. You mentioned the results of our review of additional accounts last week , so we’re very focused on that,” he told the FOX Business Network’s Maria Bartiromo on Mornings with Maria.
A recent audit raised the estimates of potentially fake accounts from 2 million to 3.5 million, prompting Bartiromo to ask: “How do we know that it’s actually over now?”
“We expanded the review to nearly eight years,” Sloan said. “We looked at 165 million accounts. What we found was that there were potentially 3.5 million that were unauthorized. Frequently what happens is an authorized account and a potentially unauthorized account look very similar.”
He reassured Bartiromo that the account review process is over and explained how the scandal happened in the first place.
“We had an incentive plan in our retail banking group that drove inappropriate behavior. When issues began to occur within our retail banking business we didn’t move as quickly as we should. When they got escalated to the senior management, again, we didn’t move as quickly as we should.”
Sloan then discussed the steps the bank has taken to prevent similar scandals from happening in the future.
“We fundamentally changed the company in terms of how we’re organized, we’ve centralized corporate enterprise risk functions, ended that incentive plan, we changed management. So we’ve made many comprehensive moves to deal with that. Clearly, we made a mistake, we had to take responsibility and we’re now fixing anything that we broke.”
When Bartiromo asked if the company is still at risk for more legal fallout, Sloan replied, “I’m very optimistic about the future of the company, but at the same time I made a promise and the management team has made a promise to ensure that we’re turning over every stone in the company. So I can’t promise perfection, but I can promise that we’re taking a thorough and comprehensive review of the company and if there are issues we will be very transparent about that.”