After weeks of ugly headlines, the worst of the fallout may just be starting for Wells Fargo, according to a new study on the bank's troubles.
The scandal in which Wells Fargo admitted to signing up millions of customers for programs without their knowledge or consent initially cost it a $185 million fine. However, that could be only the beginning as the reputational damage intensifies.
The bank stands to lose $99 billion in deposits, $4 billion in revenue and a customer base that could dwindle by up to 30 percent, a study released Monday by cg42 showed. Ultimately, about 14 percent of customers are actually projected to switch banks, an at-risk level that a cg42 principal still said is "dramatically higher" than what would be expected from any of Wells Fargo's competitors.
"While the lion's share of Wells Fargo customers we surveyed had not directly reported being affected by the scandal, it didn't matter," Steve Beck, founder of cg42 and a competitive strategy expert, said in a phone interview. "The breach of trust the scandal created has fundamentally changed the way that they think about their institution, the way they think about the bank."
Indeed, just 3 percent of those surveyed said they suffered direct impact from the scandal in which the bank admitted that 2 million customers were enrolled in products like debit and credit cards and additional checking accounts even if they didn't want them. The effort to get customers into additional products is known as cross-selling and served as a cornerstone of the San Francisco-based bank's growth strategy.