Banking

Wells Fargo’s Mary Mack to roll out sweeping changes to branches starting Monday

Nearly 11 months after a massive sales scandal, Monday will be a big day at Wells Fargo as Charlotte-based executive Mary Mack begins rolling out new procedures affecting branches.

The bank, for example, will standardize how it handles fee refunds so customers will get them more quickly, executives told the Observer. Wells is also overhauling the approach bankers take when they talk with customers, in an effort to make the discussions seem more genuine and less scripted.

It’s the latest step by the San Francisco-based bank to rebuild trust after last September’s revelations that employees pressured by aggressive sales goals may have opened millions of accounts without customer authorization. Leading the retail bank turnaround is Mack, who’s been on the job for a year and has been traveling the country gathering input from employees.

“The past year has been really busy,” Mack told the Observer during an interview last week. “We have rebuilt a lot of trust,” she said. “It’s a journey. It’s not an event.”

Wells is referring to the new initiative as “Change for the Better,” according to an internal memo from this month reviewed by the Observer.

More than 800 leaders in community banking and other parts of the company will attend kick-off conferences starting Monday for phase one of the plan. Some changes are expected to start as early as this week, such as the new approach to customer conversations. A host of others will launch in September, under a two-phase initiative rolling out through early next year.

The third-largest U.S. bank agreed last year to pay authorities $185 million to settle allegations over fake accounts, and has taken a variety of steps including firing some executives to move past the scandal. But it keeps stumbling.

Last Thursday, Wells said it may have steered thousands of car purchasers into loan defaults by charging them for unrequested insurance, an admission that came after The New York Times obtained an internal report on the matter.

Mack jumped into the fray in July when she took over the community banking segment just before it was engulfed in the scandal, shifting from her role in St. Louis overseeing Wells’ brokerage unit.

Under Mack, whose career with Wells and predecessor companies began with Charlotte’s First Union, the bank has made a growing number of changes. Those include revamping the retail bank’s leadership structure, eliminating product sales goals and launching a new compensation plan for retail bankers.

In the latest leadership changes, the company on Friday announced Regional President Kendall Alley, who had overseen Charlotte and western North Carolina, will now supervise a smaller territory focused on the Charlotte metro area. The move was part of a previously announced nationwide consolidation of roles to tighten controls in the wake of the scandal.

Wells’ latest branch changes are meant to “reshape the Wells Fargo experience” for customers and employees, according to Mack’s memo.

One change affecting employees eliminates weekly group meetings between branch managers and bankers, said Laurey Cosentino, head of customer and branch experience for community banking. Those bankers already interact with their managers throughout the day, noted Cosentino, who sits in Charlotte and will be at the upcoming conferences in Florida and Arizona.

In a change planned later in the initiative, the bank will equip branches with “digital advocates,” an existing banker who can educate customers on how to use Wells Fargo’s digital-banking platforms, Cosentino said.

“These are quite significant changes,” she said.

Analysts and investors are closely watching the performance of Mack’s segment at a bank long famous for its ability to “cross-sell” multiple products to customers. This year, Wells’ shares have continued to underperform those of its biggest peers.

“A lot will have to do with how managers and employees all strive for the same financial goals, business goals, but also ethics,” said Ken Leon, an analyst with New York-based CFRA. “The overarching issue is getting an enormous workforce all working in the same direction.”

Mack early on faced questions about whether an insider was the right pick for the job. She said she’s up for the challenge.

“I have been with this company for 33 years,” she said. “I’ve had the opportunity to be in a lot of different parts of the company, which have been very helpful.”

She said her time with Charlotte-based Wachovia, acquired by Wells in 2008, is also coming in handy, citing that bank’s “service-oriented growth culture.”

As her work continues, Mack said her employees remain one of her most important constituencies. Wells fell under scrutiny in the scandal from claims of former employees who said they were fired or otherwise retaliated against after reporting misconduct to the bank’s ethics line.

“We’ve all said the same thing, which is we have no tolerance for retaliation,” Mack said.

Deon Roberts: 704-358-5248, @DeonERoberts

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