Strong network drive consumer loans
We’ve seen how Wells Fargo & Co (or Wells Fargo) (WFC) does well in loans, especially auto loans. Yet the bank with historical ties to the western U.S. also offers a range of other retail financial products. Its extensive branch and community networks enable Wells Fargo to maintain a strong position in retail, or consumer loans.
Products for every retail client
The bank provides a complete suite of retail services—deposits, debit and credit cards, card loans, education loans, and small business loans. In all of these areas, Wells Fargo performs among the top three. Wells Fargo has the second-largest deposit base of all U.S. banks. It is the largest small-business lender and the largest auto lender.
Retail services help the bank generate interest income. The diversity of services it offers also helps the bank to cross-sell. Cross-selling simply means selling an existing customer other services you offer as well. Take the example of a standalone Wells Fargo credit card customer. Wells Fargo uses the existing credit card relationship to sell the customer another product, such as a checking account or an auto loan.
Leveraging network to sell more products per customer
Cross-selling is an integral part of Wells Fargo’s strategy. In fact, none of its competitors, including Bank of America Corporation (BAC), JP Morgan Chase & Co (JPM), and Citibank, of Citigroup Inc (C), have matched Wells Fargo in cross-selling. Some of the small, community-focused regional banks cross-sell effectively, such as those included in the Financial Select Sector SPDR ETF (XLF). But no other large bank does it as successfully as Wells Fargo.