The financial and banking industry has gone through a lot of upheavals, especially since the pandemic. This Wells Fargo SWOT Analysis will highlight how its strengths and weaknesses have kept them at the top of the business world for decades.
Wells Fargo is a multinational financial service company in California. It has developed tremendously in the previous several decades to become the world’s 2nd most prominent financial services corporation in market capitalization. They have a wide range of services in financial consulting, investment brokerage, and banking. The financial services business has over 13,000 ATMs and 6000 banking facilities in the United States.
According to statista.com, Wells Fargo’s revenue in 2020 was estimated to be $72.34 billion. In addition to being a significant participant in the United States, Wells Fargo has expanded its activities overseas. They operate in over 35 countries and have over 75 million customers worldwide.
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Wells Fargo SWOT Analysis – At A Glance
|Wells Fargo & Company
|Henry Wells, William Fargo
|San Francisco, California, U.S.
|$78.492 Billion (FY 2021)
Wells Fargo SWOT Analysis
Wells Fargo & Company sustains its market leadership by thoroughly evaluating and revising the SWOT analysis. It intends to examine Wells Fargo’s strengths and shortcomings. It also investigates the possibilities and risks the Bank may face now and in the future. Wells Fargo SWOT Analysis is a tried-and-true management tool that allows them to assess its business performance against its rivals.
Wells Fargo SWOT Analysis Strengths
Every company has some strength that allows it to remain competitive in the market. The importance of this Wells Fargo SWOT Analysis cannot be ignored. Organizations with more excellent capabilities rise to the ranks to become industry leaders. That is why the corporation continuously attempts to turn its flaws into strengths. Here are some of the strengths:
Solid Financial Position: Companies with vast financial resources might obtain subsidiaries to compete effectively. Wells Fargo has exposure to a significant quantity of development funding since it targets multiple nations and serves various types of people.
Business Ideologies: Wells Fargo’s corporate strategy is built on five fundamental values that serve as the foundation for everything the banking and finance organization does. These principles include strict customer service, people as the most crucial factor, professional standards of morality and honesty, equality and diversity, and leadership.
Eco-friendly Policy: Wells Fargo is a company that is actively working to reduce carbon emissions. It has donated more than $10 billion to eco-friendly firms. Furthermore, it has acquired a goal-setting certificate for its target of lowering greenhouse gas emissions by 35% compared to 2008.
Big Four: The four most prominent financial institutions in the United States are Bank of America, JPMorgan Chase & Co., Citibank, and Wells Fargo, the nation’s fourth-largest bank. Four banking organizations control the US banking sector and intend to expand it abroad. Wells Fargo benefits significantly from being a part of the four large organizations.
Prestigious Brand: Wells Fargo has specialized in working with small and medium enterprises from its beginnings and has accompanied them to the pinnacle of their respective industries. As a result, the Bank has developed a highly valued brand, currently rated 42nd in the world.
Wells Fargo SWOT Analysis Weaknesses
It is usual for a giant organization like Wells Fargo to have specific vulnerabilities. In a competitive industry, any shortcoming might stifle a company’s ability to develop faster than its competitors. By examining the Wells Fargo SWOT Analysis, they may make long-term goals to turn those weaknesses into strengths. The following are some weaknesses:
Scandal: Employees at Wells Fargo were alleged to have established millions of accounts in clients’ names without their knowledge to satisfy sales objectives in 2016. The Bank paid a $3 billion fine as part of the settlement. Following the controversy, many long-time clients switched to rival banks, causing the Bank to lose face, primarily due to a lack of confidence.
Operational Cost: Wells Fargo has continuously high operational costs, either as a result of fines it has suffered as a result of different litigation or as a result of antiquated machinery. Although Wells Fargo’s high operation cost is decreasing its earnings, the Bank’s operations cannot be sustained in the long run unless the expenses are reduced.
Negative Publicity: Since the controversy, the public has lost faith in Wells Fargo. The Federal Reserve is constantly scrutinizing it. Wells Fargo has lost several customers due to the lending restriction. When Wells Fargo attempted to cope with the crisis, rivals from other industries disseminated rumors. They fueled the claim to damage Wells Fargo’s image in the public eye, resulting in the loss of prospective new clients.
Scarcity of Technology: Companies must stay up with technological advancements as the world evolves in technology and innovation, or they risk losing clients. Unfortunately, Wells Fargo’s outdated technologies have increased system failures and consumer annoyance. Given the expense and difficulty of changing, the bank has battled to modernize its financial system. Its out-of-date technologies also make it increasingly challenging for the Bank to meet regulators, causing it to lose credibility.
Wells Fargo SWOT Analysis Opportunities
To withstand the intense market competition, a corporation must analyze its options. They must adapt the Wells Fargo SWOT Analysis to take advantage of these opportunities to continue expanding in the future. While focusing on their opportunities, they should also evaluate the state of the market. Wells Fargo has the following opportunities:
Small Towns: Wells Fargo may expand by offering services in smaller cities and towns after capturing and dominating most large cities worldwide. The corporation could consider markets outside of the United States, such as China or India, experiencing rapid economic development while also implementing significant financial reforms.
Emerging Markets: Wells Fargo’s competitors moved into their market share due to the bank’s poor position in the commercial sector. As a result, it is the moment for Wells Fargo to rise to the top of the industry by snatching market share from its competitors in the commercial sectors.
Variation in Portfolio: Diversification is necessary to keep cash flows flowing, regardless of how well a firm performs. The chance of bankruptcy is more in the banking industry than in others. Wells Fargo can protect its interests by diversifying into more reliable companies. Because of its financial soundness, Wells Fargo can quickly diversify its business activity.
Wells Fargo SWOT Analysis Threats
All businesses that succeed in a highly competitive environment must face challenges that might halt their expansion. According to Wells Fargo’s SWOT Analysis, other competent competitors’ market circumstances and changes in client preference might be widespread risks. Here are the threats:
Worldwide Recession: A catastrophic global recession is already apparent in many nations worldwide due to the damage and destruction of economies, which has resulted in the loss of millions of jobs. Customers defaulting on loans and mortgages might hurt Wells Fargo during the global crisis.
Competition: The banking sector in the United States is very competitive. According to recent sources, the United States has 4,951 commercial banks. Wells Fargo must compete with all these institutions to stay afloat in the banking market. Although Wells Fargo has a lot of competitors, it is in a tight race with Bank of America.
Government Policies: Even though Wells Fargo has cleared their name in maximum cases, governments may still refuse to allow the bank to operate in their nation. Because of Wells Fargo’s terrible image, it’s possible that if the bank seeks to extend its activities internationally, it will be prohibited or have a tight check on its operations due to its shady past.
Wells Fargo SWOT Analysis Overview Template
Recommendations and Conclusion for Wells Fargo
We have some recommendations for Wells Fargo that will help them prosper in the future:
- The organization must increase transparency and responsibility, focus on future activities that take advantage of opportunities, and raise awareness.
- They may invest in research and development and product areas with more cash in the bank.
- The new tax policy may substantially influence company practices and provide new opportunities for Wells Fargo to boost profitability.
After thoroughly examining the Wells Fargo SWOT Analysis, we have concluded that Wells Fargo is the world’s premier banking institution. Some major problems are the economic downturn, lawsuits, rising prices, a terrible public image, and scandals. Wells Fargo should diversify its market and product offerings while avoiding costly lawsuits.