You'd be excused for thinking that Wells Fargo (WFC -0.39%) is on the verge of losing customers, as the nation's third biggest bank by assets was caught opening up to 2 million fraudulent customer accounts in order to boost its fee-based revenue. Despite the egregious nature of its behavior, however, there are reasons to think that few Wells Fargo customers will actually leave.

The Motley Fool's Gaby Lapera and John Maxfield discuss this in this clip from Industry Focus: Financials. Listen in below to learn the details of how Wells Fargo ran astray of consumer protection laws but may still be insulated from abandonment by its customers.

A full transcript follows the video.

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This podcast was recorded on Sept. 12, 2016.

Gaby Lapera: I have to disclose I feel like, I closed down my Wells Fargo account in 2014, I want to say it was. As soon as I left Lincoln, Nebraska, because that was the only big banking option in Nebraska. As soon as I left, I closed my Wells Fargo account and moved to Bank of America and have had a much better experience. I think I was telling you earlier that I think that's the only time in history that anyone's like, "Wow. Bank of America is so great!" I feel like I should let listeners know that I am a little bit biased when it comes to Wells Fargo on a personal basis, but I'm going to try and keep that out of it.

Going back to what you were saying, I don't know. I don't know what consumers should do. If it were me, I would probably leave, but that doesn't mean that you necessarily should. I think you should go over your bank statements to make sure that you only have products that you actually signed up for. What do you think? What would you do if you were a Wells Fargo customer? Are you a Wells Fargo customer?

John Maxfield: I am not a Wells Fargo customer. I am a Bank of America customer as well. Here's the thing to keep in mind in terms of whether customers should leave. It's not necessarily whether they should leave, but it's whether they will leave.

Lapera: That's true.

Maxfield: Should you leave if your bank is doing this to you? Uh, yeah, right? I mean like or else what is going to cause you to leave your bank? The market should be sending signals to the banks through customers coming and going that either affirms what they're doing or goes against it or denies it. Right? This type of behavior should not be permitted in the market. The problem is that there are inefficiencies in the relationship between the consumer and the bank that makes it difficult for the consumer to just leave their bank even if the bank is doing something egregious toward them.

Let me talk specifically about that. There are these things called switching costs. Let's say, in your situation, you left Lincoln, Nebraska, you want to open a new bank account. Right? The problem is that let's say you already have an established job, so you have direct deposit going into that account. Let's say you pay all your bills out of that account automatically. You have all of these strings that go out from that bank that make it really difficult and inconvenient at the very least to go from one bank to another bank.

It's for this reason that studies have shown, in the past, that the switching costs of switching from one bank to another is really high which insulates banks from the downside of bad behavior of customers leaving. Whether you should or should not, you probably should. Whether you actually will, that's totally dependent upon whether you're willing to go through the time and inconvenience, which most people aren't, of switching your accounts.

Lapera: I was. That's a story for another time. That actually does bring up something that I want to talk about. Obviously, you said that banks are insulated from customers leaving. Do you think that partially explains what we've been seeing in Wells Fargo stock price? I don't know if anyone has looked at it recently, but month to date, Wells Fargo is only down 4%. The KBW, the bank index, it's down 0.72%. You would think that after this kind of shocking news that Wells Fargo would be way farther down, but it's not.

Maxfield: Yeah. I think kind of to the point that we've made. All the other banks have engaged in similar types of behaviors. Basically, they're all the same. It's not like... I don't think investors are going to go out and punish Wells Fargo much more than they're punishing other stocks. I think it's pretty much been presumed almost over the last decade that unfortunately, this type of stuff goes on. Even beyond this, let's not lose sight of the fact that... I mean, this is egregious what Wells Fargo did. It's horrible, but it's still an incredibly well run bank.

Lapera: To that point, I just want to point out I have a table in front of me that has the fines paid by banks over the last eight years. Bank of America is around $58 billion. JPMorgan is around $31 billion. Citigroup is around $13 billion and Wells Fargo is the winner at only $10 billion.

Maxfield: That's a lot of money.

Lapera: Yeah. That's a lot of money, but it's a lot less than $58 billion.

Maxfield: Yeah, that's a lot of money. So, Wells Fargo did something bad, but on a relative basis, it doesn't seem to be as bad as many of its peers. Then when you look at the fundamentals of its actual business, they're good at managing credit risk. They run an extremely efficient operation and as a result they have one of the highest profitability figures in the industry, other than U.S. Bancorp. When you counterbalance this one instance, which earlier in the show you said it cost $185 million for Wells Fargo, that's a big fine for you and me, but for Wells Fargo, that is a fraction of the $5.5 billion or so that it's earned.

Lapera: That's basically an accounting error at that point.

Maxfield: Yeah. It's like a slap on the wrists. When you factor in and you look at the other terms... the consent order between Wells Fargo and the Consumer Financial Protection Bureau which was the regulatory bureau that headed the action up against Wells Fargo, they're just not very stringent requirements. When you counterbalance all the good that Wells Fargo brings to the table, I still think that heavily outweighs the bad of this instance.