As competition to serve middle-market companies heats up, Wells Fargo is angling to secure the lead bank role for those commercial clients.
To further that goal, the San Francisco-based lender is focused on refining its product offerings and coverage model to address the needs of both lower middle-market businesses — generating $10 million to $50 million in annual revenue — and upper middle-market companies, with $100 million to $1 billion in annual revenue, said Jessica Murphy, Southeast division executive in Wells’ commercial bank.
Snagging commercial customers earlier in their business journey and deepening those relationships as they grow is a focus for Murphy.
While companies on the smaller end of the middle market tend to work with one bank, larger firms may have syndicated bank groups. Needing more than a current provider offers can lead commercial clients to change banking providers.
“One way that we win business is to provide the ideas, and have the better toolkit,” Murphy said during a recent interview.
A lead bank typically serves in a coordinating role in larger corporate finance transactions, managing loan syndication and securities underwriting.
No longer constrained by a $1.95 trillion asset cap, Wells Fargo is able to take in more commercial deposits and push for stronger growth in commercial banking, CEO Charlie Scharf has indicated.
The commercial bank’s fourth-quarter revenue of $3 billion was down 3% year over year and up 1% from the prior quarter, while net income of $1.1 billion was down 5% from the prior year and down 2% from the previous quarter. Wells hired 185 commercial bankers last year and continues to hire this year, she said, although the bank declined to share a target for 2026.
The ideal client relationship Wells is targeting: “We met you as you were getting founded and took great care of you, and then we grew with you and provided you the best ideas, the latest and greatest at every step of the way, so that any kind of journey that you're on, we're always your first call,” Murphy said.
To do that, the $2.1 trillion-asset lender has to continue honing its products and services and meet evolving expectations of those commercial clients, she acknowledged.
A recent middle-market indicator report that Wells helped produce in partnership with the National Center for the Middle Market revealed that 85% of surveyed companies grew revenue last year, but only 56% added employees. The offices of the CFO, treasury staff, controller and auditor — areas the bank typically interacts with — are not normally company segments growing headcount, Murphy said.
That informs how the bank aims to show up as a financial partner. There’s a benefit in “every product or service that we offer that makes their collections more efficient, or makes it easier for them to get access to capital to grow in a certain way,” Murphy said.
Those functions are “done by a pretty finite, overworked group of people,” so the bank’s ability to make them more efficient can help it stand out, Murphy said.
Murphy pointed to a treasurer at a company using Wells Fargo’s services, now armed with the capability to log in securely via mobile, enabling her to approve transactions from her phone, which she couldn't do with another bank.
Being able to approve time-sensitive wire transfers while away from her desk means she can attend her kids’ soccer games, Murphy said.
“I have to be focused on making sure we give them the most productivity-enhancing tools, so they can scale their company” without having to add to headcount, Murphy said.
Wells faces no shortage of competitors gunning for more middle-market business. Murphy believes the lender has a leg up over rivals in its ability to offer a range of services to clients as they grow — from a business essentials treasury platform for smaller customers, to bringing in Wells investment bankers to help a client buy their competitor — and how various units work together.
“A number of banks do offer bits and pieces,” she said, but “not every bank can offer that to these clients.”
Yet, the bank can’t become complacent. Wells is investing “heavily” and “strategically” to develop products and services for the future, she said. The bank declined to provide more detail on those investments. Commercial bank priorities this year include lending platform modernization, enhancing digital tools and improving payment platforms, Wells said in January.
“We're sitting in a period when there's going to be incredible advancement, change,” Murphy said. “On any given day, you could feel really optimistic and great about a product, and then the next day you're like, ‘Oh, we need to make this better.’”
Many bankers on Murphy’s team have grown up with their clients — the average relationship tenure is 21 years — and the bank’s focus on the middle market dates to the 1970s, Murphy said.
As those businesses change hands, the next generation of middle-market leaders has been to business school and has some different views than their predecessors, including how they want to interact with a bank, or refusing to accept checks in favor of other payment methods, Murphy said.
“We're seeing things accelerate in that regard,” she said. “But they also demand it. They have 24/7 interests. They want quick responses [from their bank], whereas maybe the former generation was like, ‘It's fine if you just call me back tomorrow.’”
The middle-market report also informs the bank of middle-market customers’ adjacent concerns. Cybersecurity, which came up repeatedly in the report, is also a top focus for the bank, Murphy noted.
Cybersecurity isn’t something the bank leads with in client conversations, “but people are deeply concerned about it, so when we think about our products, our features, having that validation can be a good way to consider meeting the concerns of people and then also having the product set that's going to be relevant,” she said.
