Businessmodel of Wells Fargo

Customer Segments

Wells Fargo serves a variety of customers across its three operating segments:

• Community Banking, which principally serves general consumers and small and medium-sized business across multiple sectors;
• Wholesale Banking, which serves a range of small and medium-sized businesses, multinational enterprises, government and public bodies, and real estate investors; and
• Wealth and Investment Management, which serves corporations, high-net-worth individuals, and high-net-worth and ultra-high-net worth individuals and families. Wells Fargo principally serves customers in its home market of the US. However, it also provides services to multinational US corporations with operations.

Value Propositions

Wells Fargo provides value to its customers in the following ways:

• Its reputation and industry standing, with the Company established as one of the largest, most well-respected, and most ubiquitous banking groups in the US;
• Its track record for providing reliable and responsible products, with the Company having provided a broad range of high-quality products and services to its customers over a period of many years;
• Its accessibility, with the Company operating a wide-reaching US branch network and offering online, mobile, and telephone banking services; and
• Its industry experience and technical expertise, with the Company employing highly-trained personnel across its three operating segments, as well as experienced industry executives. ### Channels

Wells Fargo operates a website at www.wellsfargo.com, through which it provides information on its various products, services, and activities. The Company offers an online banking service, through which customers are able to manage their accounts, set up payments and apply for financial products. Much of this functionality is also available through the Company’s mobile app.

Wells Fargo operates a network of more than 6,000 retail banking stores across the US, as well as 13,000 automated teller machines. The Company also operates a number of international locations – including across Canada, Latina America, Europe, Asia Pacific, and Africa – through which it provides businesses with international operations services via local relationship managers.

Customer Relationships

Wells Fargo offers a range of services to its customers on a self-service basis through its online banking platform and mobile application. Through these services customers are able to move money, set up regular payments, manage account details, and apply for financial products without interacting with members of the Wells Fargo team.

The majority of the Company’s services are provided either in person, through the Company extensive branch network, or over the phone. These channels enable customers to access a greater degree of personal care, with Wells Fargo representatives working with them directly. Wells Fargo also works closely with its commercial and institutional clients, providing bespoke services with a view to establishing longstanding client relationships.

Wells Fargo provides ongoing support to its customers, operating a 24/7 customer service teams that can be contacted by customers over the phone or by email, as well as through formal in-person appointments. The Company also provides a range of online resources, including FAQs and guides, as well as offering a range of financial education resources that cover financial health more generally.

Additionally, Wells Fargo operates social media accounts – including with Twitter, Facebook, and LinkedIn – through which it can interact with customers directly.

Key Activities

Wells Fargo is a banking holding company. Through its subsidiary companies, Wells Fargo provides a range of banking, insurance, trust and investments, mortgage banking, investment banking, retail banking, brokerage, and consumer and commercial finance service.

The Company has three operating segments: Community Banking, which provides financial products and services to consumers and small businesses, such as checking and savings accounts, credit and debit cards, and various lending products; Wholesale Banking, which provides financial services to larger businesses; and Wealth and Investment Management, which provides bespoke wealth management, investment advisory, and other private banking services.

Key Partners

Wells Fargo collaborates with a range of partners throughout the development and provision of its services. These partnerships include:

• Supplier Partners, comprising suppliers of tools, technology and services that support the Company in the development and provision of its services;
• Strategic and Alliance Partners, comprising a range of companies, principally banking and technology companies, with which the Company shares resources and collaborates on joint-venture projects; and
• Banking Partners, comprising banking and financial institutions that support or supplement the Company’s own banking services. Wells Fargo has recently agreed a number of partnerships, including an agreement with Bank De Oro Unibank to provide remittance services; a financing deal with education organisation Hispanic Scholarship Fund; and a data-sharing tie-up with software firm Xero.

Wells Fargo also has a number of supplier diversity partnerships, including with National Minority Supplier Development Council, Women’s Business Enterprise National Council, and National Gay and Lesbian Chamber of Commerce.

Key Resources

Wells Fargo’s key resources are its financial resources, its branch network and sales infrastructure, its technology and communications infrastructure, its partnerships, and its personnel.

Wells Fargo has a branch network spanning more than 6,000 individual branches, in addition to more than 13,000 automated teller machines. The Company also maintains a physical presence in a number of international markets.

Searches of records published by the US Patent and Trademark Office identified 14 patent application filed in the name of Wells Fargo, including applications entitled ‘System and method for a mobile wallet’, ‘Fingerprint check to reduce check fraud’ and ‘Financial services store’. The Company, however, does not depend materially on any one patent.

Cost Structure

Wells Fargo incurs costs in relation to the operation of its branch and automated teller machine network, the maintenance of its technology and communications infrastructure, the implementation of advertising and marketing campaigns, the management of its partnerships, the payment of professional and banking fees, and the retention of its personnel.

In 2015 Wells Fargo accrued total non-interest expenses in the amount of $49.97 billion. The Company’s largest expense related to the payment of salaries to its more than 265,000 employees, which totalled $15.88 billion. It also accrued substantial commission and incentive, and employee benefit costs, in the amount of $10.35 billion and $4.45 billion respectively, and external professional services and occupancy costs amounting respectively to $2.67 billion and $2.89 billion.

Revenue Streams

Wells Fargo generates revenue through the provision of various consumer commercial and private banking services, deriving revenue principally from the collection of fees and commissions.

In 2015 Wells Fargo generated $86.06 billion
 in revenues, up 2 percent on the $84.35 billion recorded by the Company in 2014. The Company attributed this small increase to higher net interest income, gains on sale of debt securities, debit and credit card fees, and trust and investment fees.

In 2015 Wells Fargo derived the majority of its revenue from the activities of its Community Banking segment, which accounted for $49.34 billion in revenue, derived largely from card fees, lending fees, and service charges. This was followed by the Wholesale Banking Segment, which generated $25.90 billion, with the Wealth and Investment Management segment generating $15.78 billion.