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Uh Oh: Bad Customer Service Is Good For Banks
By Martha C. White
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Dick Bove is mad as hell, and he’s not going to take it anymore. The banking analyst with Rochdale Securities used his most recent research note on Wells Fargo as a soapbox to blast the bank for its lousy customer service. He details a litany of weird fees, bureaucratic bungles and tone-deaf associates — familiar gripes for many big-bank customers. But then he says something as unexpected as it is disheartening. Bad service isn’t hurting Wells Fargo’s stock performance; in fact, it might even help. What’s good for investors, it seems, is bad for customers.
“For the last 40 years I believed the quality of the product was the key determinant to the success of the company,” he says. In banking, the “product” — ie. money — is a commodity, so the determining factor is the delivery method or service. So how is it that Wells Fargo, which Bove characterizes as “one of, if not the best-run bank in the United States” can thrive in spite of customer service?
Read the entire Martha White article
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