Lending And Credit Offerings By Wells Fargo-Myassignmenthelp.Com

Question: Discuss About The Lending And Credit Offerings By Wells Fargo? Answer: Introduction Financial aspect is the most essential aspect of any individuals life. For managing the needs which provide a convenience to lifestyle aspects, light has been shed upon the lending and credit offerings by wells Fargo consumer banking service. This offering is categorised in various forms of credit and loan requirements for e.g. Credit against mortgage, home loans, providing credit limit through credit cards and loan against education etc. This bank helps in management the borrowing needs of various customers according to their capacity to repay. Since it is a risk taking activity to provide a loan, it is a prime responsibility for any banking industry to take care of the repaying capacity of the borrower which is judged by the credit score an individual has. Product Offering The offering to meet the borrowing needs of the customer focused is loans and credit product. This product deals with funding the requirement of the customer according to the nature of the need. These financial needs are in the form of home loans, Personal loan etc. For e.g. the customer for the personal needs, require to qualify the credit verification which is done on the basis of repaying any current debts and verifying the income of the customer. On the basis of online funding and application process, the loan is approved (Wells Fargo Works, 2016). The rate of the interest may vary with the term of the loan which may be in between the range of 12-60 months. For e.g. the personal loans may charge an interest rate of 12.99% if the term is for 5 years. The interest rate is lower if the life of the loan is short. The loans approved may be in between the range of $3000- $100000 depending upon the requirement and credibility of the customer. Consumer offering The product offering is under the category of Non store consumer lending which has seen a decrease recently. This is due to reason of offering risky loans to compete with the other banks which has led to losing money. The customer base for lending is entirely dependent upon the identifying how to treat the customers basis their age and income. A young age group belonging to middle class group would finance their needs through a short term loan while an old age group belonging to business class group would satisfy the need through a long and a large amount of loan. The marketing of lending loan services would be more accessible if the bank helps the customers to save tax. This is a way of relieving the customers from taxes up to an extent by bundling it with various loans approved. Development of New product Due to the decrease in the lending of loans experienced in the market, which is because of offering risky loans earlier to compete with other banks there is a need to re develop and simplify the process. The low and middle income group of people feel that the credit policy of the bank to be too tight. If the lending process includes the down payment to be low with introducing programs for assisting consumers with counselling their needs, then the inability to become eligible for loan amongst borrowers will become simple and convenient. Lifecycle of the product The offering which is proposed with a modification is in the stage of Introduction and release. This stage requires analysing the willingness of the customer to pay for the offering. An extensive research before testing it in the market before releasing it for distribution is important in this stage. The bank must ensure no loss to the credit and financial division if there is any disconnect with regards to the facts and figures regarding the hidden cost. The implications of this on the new marketing strategy could be the customer switching the bank with another competitor providing better service in loan offerings (Wells Fargo Works, 2017). Channels of Marketing Wells Fargo finds it efficient to use both direct and indirect channels of distribution in order to get the loans and credit offering in the market. Direct channel does not include middlemen and involves reaching directly to the customer. This is done by making the opportunities available to apply for loans online directly. However, Indirect has various services related to dealer, customer service, collections and recovery. Indirect channel enlists three distribution processes like customer to dealer involving completion of application for loan, reviewing credit score, signing contract basis of documents produced. Then, the dealer does management and financial reporting, booking the loan and processing the payment. Finally, Collections and recovery manage the recoveries of the loan disbursed in case of any delinquency (Wells Fargo Works, 2017). Marketing Strategy The bank chooses indirect channel because distributors are specialized in their marketing techniques in the competitive market. Alternatively, where the market coverage has to be limited then direct channel is used especially high income group of potential business class customers. The bank is targeting to simplify the lending process for making middle and low income groups eligible. These groups include youngsters who need loans for short term for small amounts. To get a complete control of the market indirect channel is used so that maximum coverage is attained quickly and in specialized way. Value chain The bank aims in establishment of relationship with its clients through providing direct loans or through indirect channels. Improved and quick loan processing through dealers with provision of good customer service helps in adding value to the lending process through dealers (Wells Fargo Dealer Services, 2017). Proper counselling for catering to individual needs and discounting activities bundled with tax reduction benefits help the middle income market to establish a sound customer- lender relationship. Alternatively, when it is a requirement for providing a value add service of privacy, anonymity and confidentiality concerns to business clients or HNIs then direct marketing plays a vital role. Strategy to price The price is a determining factor of finding the clients trust in the name of the bank. It is competitive pricing which helps the customer in choosing the bank for its loan needs. The bank follows an approach which is value based and customer perceived. Allowing the customers to finance their needs by adding a tax benefit through its software draws the clients to choose a loan in which interest rate might be not very low but the benefit to pay less on taxes is profitable both from a customer and banks perspective. In order to increase the banks profitability, the clients with a high loan amount with high rate of interest are eligible for in-house tax service software which is free of cost. They can easily manage their taxes from their home. They are trained and counselled by financial analyst to do their taxes efficiently. Value add services like these help to attract clients for large loans profitable both for the bank and the client. Conclusion The analysis of the banking institution is the competitive environment it survives in order to sustain amongst other banks. Wells Fargo is the largest banking institution in the US. It competes with big banks like bank of America. The changing perceptions of customers according to their needs are a big challenge to hold a good market share. This is determined by selecting the target market smartly so that services of the bank are customised with proper study of the segment targeted to be catered. Adding value to the product offering attracts more clients which in turn increases the banks revenue. References Wells Fargo Dealer Services (2017). Welcome to Wells Fargo Dealer Services. Retrieved from https://www.wellsfargodealerservices.com/default.asp?redirect=false Wells Fargo Works (2016). What steps to take before filing a credit application form. Retrieved from https://wellsfargoworks.com/business-credit-center/article/what-steps-to-take-before-filing-a-credit-application-form Wells Fargo Works (2017). Direct vs. indirect distribution channels. Retrieved from https://wellsfargoworks.com/marketing-center/article/direct-vs-indirect-distribution-channels Wells Fargo Works (2017). Understanding the life cycle of a project management or service. Retrieved from https://wellsfargoworks.com/marketing-center/article/understanding-the-life-cycle-of-a-product-or-service