5 things the Wells Fargo CEO could have said to Senator Warren

Watching Wells Fargo CEO John Stumpf get grilled by Senator Elizabeth Warren should make any self-respecting financial professional squirm. Embroiled in a fake account opening scandal that made Twitter light up in anger and frustration, the bank's CEO appeared before the Senate banking committee last week in what turned out to be a come to Jesus meeting. Warren unleashed a barrel full of whoopass on the Wall Street CEO and Stumpf basically just sat back and passively absorbed it all, even when she called him 'gutless'. With his hand bandaged from an unknown injury, his sheepish manner appeared to be the antithesis of how we picture a big bank CEO. "You have to look across the firm in this instance and say, what the hell are they doing?" said Dick Bove, Rafferty Capital's banking analyst. So, what should Stumpf have said? Well, to start, fintech can help. Wells Fargo is working on a variety of fintech initiatives that stand to help customer service and improve transparency. Here are some alternative responses the Wells Fargo CEO could have said in response to Senator Warren.

• Banking customers can now send each other cash. Soon, they'll be able to send p2p payments to friends and family at other banks. Who needs Venmo?
• We're working with fintech startups via our accelerator to improve our product selection and the variety of services we can offer our customer base. We recognize that for our future, we're not going at it alone -- our fintech ecosystem will play a big role.
• Soon, banking chatbots will be able to reactively, and hopefully, proactively service our customers with questions about their accounts or loans.
• We're busy testing blockchain, a very ambitious underlying technology that would change the way the banking is done. In fact, if we were using blockchain, this scam probably wouldn't, or couldn't, have happened.
• A lot of work is being done in business intelligence. With better oversight and use of big data and analytics, we would see this type of thing coming and correct it. Advances in artificial intelligence can help here, too.

Listen, Wells has an issue. Like most financial institutions, it has an aggressive sales culture. It's gotten the firm in trouble before. But worse, modern banking and the thirst for scale has turned these types of institutions into faceless profit-seeking algorithms. It's lost the confidence of customers and the public. "For Wells Fargo, as for any megabank, 'the customer' is not a person—it’s a dataset, with means, medians, correlations, and metrics, like 'cost of acquisition' and 'churn rate' and 'marginal profitability of product X.,'" wrote James Kwak, a University of Connecticut professor of law. "Yes, customers matter, but in the generic sense that applies to all businesses: customers are where the money comes from." And for that malady, fintech can certainly help.