Wal-Mart caught lying on their bank application
March 16, 2007Wal-Mart has abruptly withdrawn their application to open a so-called industrial bank, which would have allowed them to process credit-card transactions in-house rather than paying the fees to ouside banks. It’s typical of their focus on cost-cutting, trying to squeeze out every cost they can in the system.
Of course just about everybody in banking opposed Wal-Mart’s application, fearing it was a foothold into broader branch banking. Wal-Mart kept swearing up and down that they had no plans on getting into retail banking. Then just yesterday evidence surfaced that they do in fact have such intentions–leases with some existing in-store banks that indicate plans to eventually provide retail bank services such as mortgages.
So like a lot of people Wal-Mart has been caught lying on a bank application. But instead of an application to a bank, it was their application to become a bank where they lied.
Companies lie all the time, often it’s unintentional. In any large organization, nobody can know everything that’s going on. Somebody in one division might make a statement like “we have no intention of getting into commercial banking,” when it turns out somebody in another division has precisely that intention.
On the other hand, it’s been such a disciplined company historically. That’s how it grew so quickly to surpass prior retailing giants like Sears and K-Mart. So how could somebody in such a disciplined organization have made this kind of mis-statement? Seems unlikely, more likely that it was an intentional deception.
It’s just like HP’s pretexting controversy–a company thinking they can get away with anything because they’re a giant company. Hopefully they’ll learn a lesson from this, or at least some other companies will learn even if Wal-Mart doesn’t.