Bank One Gets It

When Bank One Corp. opened WingspanBank.com two months ago, it seemed to be just another foray into cyberspace by a major brick-and-mortar financial giant.

That was two months ago. Since then, the new online bank has been acting more like a startup than most startups. It has even begun to compete against its parent: Certificates of deposit at WingspanBank.com yield rates of at least half a percentage point higher than those at Bank One’s 1,900 branches throughout 14 states.

Bank One’s CEO Gets It

Apparently, Bank One’s chief executive John B. McCoy understands a basic truth that his counterparts at Wal-Mart Stores and Toys “R” Us have missed: You can’t run a successful online operation if it acts as though its Web site is merely an extension of its land-based operation.

Unlike Bank One’s Web site, which sells only its products, Wingspan offers a potpourri of investments, mortgages and insurance from other companies. For example, Bank One customers can choose from 49 mutual funds, while Wingspan offers some 7,000.

Internet Synergy

Wingspan users have access to a variety of other features, such as 5 percent discounts on purchases from Amazon.com and other Internet marketers. However, online banking does have its drawbacks. Internet banks can’t deliver cash, and most deposits must be done via snail mail. What’s more, Wingspan customers can’t make deposits at the thousands of Bank One branches.

Halfway Measures

These limitations explain why Wells Fargo and other big players are simply offering an extension of their current services via the Internet. By doing it this way, customers of their online branches can use their brick-and-mortar Automatic Teller Machines. They also minimize the risk of losing customers to its online counterpart.

Still, some analysts feel that for every existing customer Bank One loses, it stands to gain two younger, affluent online customers who simply won’t bank with a land-anchored institution.

A Model Strategy

I agree. The customers will come, and it’s clear that Bank One has done its e-commerce homework. In fact, other huge banks should use Wingspan as a model when designing their own presence on the Internet.

But of course, they’ll wait until Wingspan is successful, and by that time it will be too late.

What do you think? Let’s talk about it.