Wells Fargo Leading 21St Century Banking
...banking on the Internet is the Holy Grail of the Banking industry'Internet banking does two things we have always wanted to do ' it satisfies our customers' needs and it reduces our costs'.it is the key to electronic commerce, which could be the most important event in commercial history." These were the words uttered by Dudley Nigg, Wells Fargo's executive vice-president of direct distribution, as he sat in his office in downtown San Francisco where mammoths such as Wells Fargo and archrival Bank of America have dominated the banking industry for over a century. (See exhibit 1, 2, and 3 for a summary of Wells Fargo Financial History.)
In early 1997, recognizing that the future of the electronic commerce "upon us," the Chairman of Wells Fargo, Paul Hazen, decided to form a think-tank to strategize how the company could take advantage of its position as a leader and innovator of the banking industry in order to solidify its position in electronic commerce. On May 21, 1997, Hazen initiated the formation of a new 'Office of the Chairman', organized around 3 major customer segments and central staff groups that support them. The objective was to bring creativity and vision to new innovations. As part of this new venture, a separate business unit dedicated to online financial services was set up, to be headed by Dudley Nigg. Given the great possibilities of the Internet, Dudley and his staff recognized many opportunities for the company, and the industry as a whole:
• Wired customers, who are on average wealthier, younger and more educated, tend to be much more profitable than unwired customers.
• The web is, by far, the most efficient channel for designing and distributing new products, and also serves as a window to web-based electronic commerce.
• The potential for fraud and mis-selling is so severe that a great advantage is conferred, to banks in...
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