Wells Fargo, one of the nation’s largest banks, was fined $185 million in civil penalties this week for opening millions of unauthorized deposit and credit card accounts without their customers’ knowledge or permission. Here, Mintel’s expert analysts discuss consumer reaction, takeaways for brands in crisis, as well as key learnings for financial marketers…

SG (2)Stacy Glasgow, Consumer Trends Consultant

In today’s connected world, consumers learn about companies’ missteps almost as soon as they occur, leading to a massive growth in consumer distrust and skepticism across all sectors. As such, companies work hard to gain faith, and any setback to a brand’s reputation must be met with a far more aggressive response than ever before. In the wake of such setbacks, it is crucial that companies not only issue more immediate apologies but also take swift and drastic measures.

Wells Fargo can follow the lead of companies that have gone beyond mere confession of guilt and have taken action. Chipotle, for example, responded to an E. coli outbreak in late 2015 with transparent communication, and it then took speedy steps to deep-clean its stores, train employees on enhanced food safety measures and design a loyalty program to win customers back. In tackling the issue, the chain even shut down on February 8 during the lunch rush – a move that was possibly harmful to its single day’s sales figures yet instrumental in rebuilding its overall brand image.

Banks face a particularly large hurdle as fed-up consumers increasingly turn to peers, online communities and robo-advisors for their financial services needs. As it relates to the situation at hand, Wells Fargo would do well to begin with an apology and then get creative in taking sweeping measures to earn back trust. Letting go of employees who were involved in the “scandal” seems necessary, but the action should not stop there. Above all else, it is critical for Wells Fargo and the banking industry at large portray a genuine, human-like fallibility in not just owning up to mistakes, but rising above them through action.

lhLily Harder, VP Research Mintel Comperemedia

The Wells Fargo “scandal” and settlement charge is certainly a big blow to the bank financially, but the long-term damage to the bank’s reputation could be even worse. At a time when confidence in big banks is shaky at best, marketers across all financial institutions should be viewing this as an opportunity to reassess their own reputations and proactively distinguish their brand’s personality.

An event such as this not only strips away consumer confidence in big banks, but it sheds light on the lack of transparency and integrity in the industry. This is a chance for marketers to hone in on these characteristics and pursue messaging that can re-build some of the faith that has been lost. It also creates an opening for those niche brands that have already differentiated themselves through distinct brand personas to rise up and leverage their differences.

As noted in a previous Mintel Blog post, cross-selling has been the key to profitability for the past decade, but research suggests that it might be time to change the product-focused approach. In light of recent events, we could be seeing a re-imagination of the cross-sell agenda into something more deeply rooted in loyalty and engagement.

Lily Harder is the Vice President of Research for Mintel Comperemedia. Lily specializes in the financial services industry, researching and presenting on the latest industry trends, competitive intelligence insights and newsworthy developments.

Stacy Glasgow is a Consumer Trends Consultant at Mintel. Stacy joined Mintel in 2013 bringing with her an exciting blend of CPG, agency and marketing experience. Her time is spent traveling the US engaging clients across global CPG, Beauty and Financial Services in meaningful discussions around the consumer trends that will propel their businesses forward.

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