Position Paper About Wells Fargo And Co. Henry Wells And William Fargo

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Position Paper
Introduction
Wells Fargo and Co. has found itself in the center of controversy after the "fake accounts" and "Over-charged on auto-insurance" scandals in 2016. The company's employees orchestrated these two frauds between 2011 and 2016, and this has tarnished the reputation of the company beyond repair, drastically affecting its operations (Corkery). For instance, the opening of the new accounts has dropped by approximately 40%, and the growth rate of the bank has lately flattened (Corkery). As a result of these scandals, the company has abandoned its expansion plan and now wants to close over 400 branches by the end of this year. Hence, it is apparent than after revelation of fraudulent activities, it will be difficult for the company to regain the glory it has enjoyed for the last couple of years (Corkery). For now, the company is mortally wounded, and it desperately needs to fast reclaim the public's confidence.
Background
Wells Fargo was established in 1852 by Henry Wells and William Fargo to satisfy the essential human needs such as connecting one client to another or one market to another through transportation of goods, funds, and services in a fast and secure manner across long distances. Wells Fargo and Co. is a diversified company divided into segments such as community wholesale banking and Brokerage businesses that offer financial services to over 70 million clients across the world (Laura and Katherine). Its headquarters are located in San Francisco, United States. By asset, it is third largest firm in the world after overtaking the Citigroup Inc. in 2015. In terms of market capitalization, it is the second largest bank after JPMorgan. By December 2015, the firm had more than 9000 retail branches with estimated 12000 ATMs (Laura and Katherine). Currently, Wells Fargo operates in 35 countries across the world. The bank has been one of the best cross-sellers of financial services such as insurance, personal loans, credit cards and wealth management services. Some of its business-based services include lending, venture capital, commercial banking services, equipment leasing and investment banking. Further, the company has performed well in online banking after becoming the only financial service company offering internet banking in 1995. The company boasts substantial economies of scale, commanding a 12% market share in the commercial market, but faces stiff competition from BOA and JPMorgan Chase (Laura and Katherine). Among the three business segments mentioned above, community banking is still generating the largest portion of the company's total revenue and yields approximately 60.0% of the total income (Laura and Katherine). Wells Fargo and Co. has enjoyed tremendous success and an excellent reputation for several years until it was hit by two massive scandals between 2011 and 2016. Before these scandals, the company commanded a good chunk of the market share.
In 2011, employees in Wells Fargo engaged in fraudulent activities of ordering credit cards for pre-approved clients without the knowledge of consumers (Corkery). Workers used their personal contact information to fill out the requests in an attempt of preventing customers from discovering the hoax. ...