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A Wells Fargo logo is seen at the SIBOS banking and financial conference in Toronto

Chris Helgren | Reuters

Wells Fargo is developing a virtual assistant to help it convert more retail banking customers into digital users, CNBC has learned.

The assistant, named Fargo, will be able to execute tasks including paying bills, sending money and offering transaction details and budgeting advice, according to Michelle Moore, the bank's consumer digital head. It's expected to be out next year after the bank releases a revamped mobile app and website in early 2022, she said.

The move by Wells Fargo, a consumer banking giant with more branches than any lender except JPMorgan Chase, is part of a broader technology overhaul under CEO Charles Scharf. Updating the bank's aging systems has been a priority for Scharf since becoming chief executive two years ago, as well as a key part of the turnaround needed after the bank's 2016 fake accounts scandal. Last month, Wells Fargo announced a decade-long plan to move computing to Google and Microsoft cloud servers.

Michelle Moore input Consumer Digital head at Wells Fargo

Source: Wells Fargo

"Everyone lives on their phone, and there's an expectation on how things should work," Moore said in a Zoom interview. "Our clients were telling us that our app was not easy to use, it's not intuitive, there were too many dead ends and clients were getting stuck."

While it had the most extensive brick-and-mortar presence of any U.S. bank for years, only being eclipsed in branch count last quarter by JPMorgan, Wells Fargo trails rivals in digital adoption. Regulators have criticized the firm's technology systems, and a 2019 mishap at a Minnesota data center knocked out customers' mobile and web access for hours.

Its 27 million active mobile users are fewer than those of JPMorgan and Bank of America. Despite the boost that the coronavirus pandemic provided for all things digital, Wells Fargo's 4.2% user growth in the past year is less than half JPMorgan's gains. Studies have shown that digital users are typically more satisfied with their banks, cheaper to serve and less likely to switch providers.

That's probably why Wells Fargo recruited Moore late last year. She is a Bank of America technology veteran who helped develop the company's own virtual assistant, known as Erica. That artificial intelligence-powered service has seen its use surge during the pandemic, tripling the number of interactions to 104.6 million in the past year, Bank of America said this month.

Early this year, Wells Fargo began studying why customers resorted to calling phone help lines and where the bank's app failed them, Moore said. She added that the redesigned app has a simpler login and consolidates payment options, whereas previously they were scattered throughout. Moore also said that future versions will be more capable, as part of the company's new digital-first efforts.

Wells Fargo revamped banking app.

Source: Wells Fargo

"We can help clients really live their lives and be more than checking balances and moving money," Moore said. "We want to be integrated and we want to help clients do their investments or buy their first house."

As for the name of the bank's virtual assistant, Moore said it was an obvious choice.

"We weren't trying to create a new brand or persona here," she said. "There's a lot you can do with 'Fargo.' Flip the word around, you can 'Go Far.' Let Fargo take you far."

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Wells Fargo has a new virtual assistant in the works named Fargo - CNBC