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Wells Fargo Scandal Pushed Customers Toward Fintech, Says UC Davis Study
vendredi 4 juillet 2025, 04:10 , par Slashdot
![]() Yang analyzed Google Trends data, Gallup polls, media coverage, and financial transaction datasets to draw a clear conclusion. In geographic areas with a strong Wells Fargo presence, consumers became measurably more likely to take out mortgages through fintech lenders. This change occurred even though loan costs were nearly identical between traditional banks and digital lenders. In other words, it was not about money. It was about trust. That simple fact hits hard. When big institutions lose public confidence, people do not just complain. They start moving their money elsewhere. According to the study, fintech mortgage use increased from just 2 percent of the market in 2010 to 8 percent in 2016. In regions more heavily exposed to the Wells Fargo brand, fintech adoption rose an additional 4 percent compared to areas with less exposure. Yang writes, 'Therefore it is trust, not the interest rate, that affects the borrower's probability of choosing a fintech lender.' Notably, while customers may have been more willing to switch mortgage providers, they were less likely to move their deposits. Yang attributes that to FDIC insurance, which gives consumers a sense of security regardless of the bank's reputation. This study also gives weight to something many of us already suspected. People are not necessarily drawn to fintech because it is cheaper. They are drawn to it because they feel burned by the traditional system and want a fresh start with something that seems more modern and less manipulative. Read more of this story at Slashdot.
https://news.slashdot.org/story/25/07/03/2349257/wells-fargo-scandal-pushed-customers-toward-fintech...
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