Citizens Financial CEO Bruce Van Saun on Thursday addressed allegations that branch employees falsified data on customer meetings to satisfy corporate goals, saying that no consumers were harmed in the process.
“If someone misreported how many calls they laid out, there’s no customer harm in that,” Van Saun said during an interview after the company’s earnings call. “There’s no connection to consumer harm, and no connection to reported financial data.”
The comments were in response to a story in The Wall Street Journal last month, in which 11 current and former employees in five states said they fabricated information as part of the “Citizens Checkup” program to meet aggressive company goals. Through the program, branch bankers set appointments with customers to discuss their financial targets.
In response to the story, Citizens has launched an internal review, which will be a “full scrub” of how the Checkup program has been implemented, Van Saun said. The review will likely wrap up in the coming weeks and will also include recommendations for improving the customer experience in the branches.
“ ’Checkup’ is one element of a sharper approach that we’re taking in the branches to heighten the customer experience, and deliver better outcomes,” he said.
The matter has drawn attention because of a sharper focus on incentive plans in the banking industry after the Wells Fargo phony-accounts scandal. The San Francisco company agreed to pay nearly $190 million last September to settle charges that more than 5,300 employees created roughly 2 million fake accounts to collect bonus pay.
During the interview, Van Saun noted that several of Citizens’ peer banks have similar customer-meeting programs in place. He said he views the incidents described in the Journal article as “isolated."
Van Saun sought to distance the Citizens matter from the Wells debacle by saying that the goals and incentives of the Checkup program are not tied to its incentive-compensation system.
“The incentive system is not tied to setting appointments,” Van Saun said. “Ultimately [the system is] about delivering customer outcomes; it’s tied to delivery of sales targets.”
Citizens, of Providence, R.I., has no plans to make changes to its goals and incentives, Van Saun said. He noted that company’s compensation system was reviewed by a third party before the Wells Fargo scandal broke.
“Put Wells Fargo way, way, way to the side,” Van Saun said. “The question here was did people feel pressure to set appointments?”
The Journal story created “smoke,” Van Saun said, but the company is analyzing the issue and is confident about the program it has in place.
“The program is here to stay,” he said. “All of the survey results we have are very positive from the customers who have undergone the checkup.”