Bank One Corporation the number four among the nation’s largest banking and financial institutes made a fundamental shift in its strategy by introducing a Internet-only bank as a separate division of Bank One Corporation in June 1999. Richard Vague, formerly the CEO of the credit card conglomerate First USA, and James Stewart set up the new and additional Internet division of Bank One which was named WingspanBank.com.
The objective of WingspanBank.com was to offer convenient, comprehensive, and objective solutions to customers at competitive prices. The national scope was to extend Wingspanbank.com beyond the 14 states in which Bank One already operated. Additionally WingspanBank.com targeted on a segment Bank One could not reach with its branches – the growing group of Internet users who disdained traditional banks. Both, the present and future users of Internet banking should have given WingspanBank.com as well as its parent company Bank One Corporation a competitive advantage over its main rivals such as Bank of America, Citigroup, US Bankcorp., NetB@nk, chase.com and wellsfargo.com.
The one million new accounts for WingspanBank.com expected by management were a very unrealistic objective. WingspanBank.com’s strategy and an alliance with Lycos continued to focus on Internet users only and not on establishing any branch system even though surveys indicated the desire of customers to have branches and a physical contact to banks as well. Unfortunately WingspanBank.com was reintegrated into the Bank One Corporation holding structure by June, 2001. This resulted also out of problems with First USA, a bad press about Bank One and the resignations of several Wingspanbank.com executives.
Table of Contents
1. Executive Summary
2. Bank One Corporation
2.1. Bank One’s History
2.2. Corporate Profile
3. Internet Banking
3.1. The Development of Internet Banking
3.2. The Growth of Internet Banking
3.3. Internet Banking as a Strategic Necessity
3.4. Driving Factors of Internet Banking
3.5. The Opportunity for Internet Banking
3.6. The Biggest Obstacle to Success
4. WingspanBank.com
4.1. WingspanBank’s Introduction
4.2. WingspanBank.com`s Implementation in Bank One Corporation
4.3. WingspanBank.com’s Features
4.4. WingspanBank’s Alliance with Lycos
5.5. WingspanBank’s SWOT-Analysis
5.6. The Reintegration of WingspanBank.com into Bank One Corporation
5.7. The Failure of WingspanBank.com
Objectives and Scope
This study examines the strategic decision of Bank One Corporation to enter the digital market by launching WingspanBank.com, an Internet-only bank. It aims to analyze the underlying motivations for this initiative, the implementation strategy, and the factors that ultimately led to the bank's reintegration into the parent company.
- Evolution of online banking and its shift to a strategic necessity.
- Implementation and operational features of the WingspanBank.com model.
- Analysis of external alliances and marketing efforts to gain market share.
- Internal and external factors contributing to the challenges and eventual failure of the standalone brand.
Excerpt from the Book
3.6. The Biggest Obstacle to Success
While there’s little question that Internet banking offers substantive advantages to both consumers and financial institutions, the issue of security is often cited as a major barrier to widespread consumer adoption. While many of the actual security issues today have been addressed with recent technical advances, financial institutions may find that consumers still perceive a bigger problem than there really is. A comprehensive online banking solution must address real security issues as well as the psychological or perceived security fears of consumers.
Summary of Chapters
1. Executive Summary: Provides an overview of Bank One’s strategic pivot toward an Internet-only division named WingspanBank.com and its subsequent reintegration due to unmet expectations.
2. Bank One Corporation: Details the historical background, extensive market presence, and corporate profile of the parent holding company.
3. Internet Banking: Explores the developmental history, growth trends, and driving economic and technological factors that turned Internet banking into a strategic necessity.
4. WingspanBank.com: Analyzes the launch, implementation strategy, specific banking features, key alliances, and the internal SWOT analysis of the short-lived digital bank.
Keywords
Internet Banking, Bank One Corporation, WingspanBank.com, Online Banking, Digital Strategy, Financial Services, E-Commerce, Banking Industry, Customer Adoption, Security, Strategic Management, Strategic Alliance, Lycos, Market Share, Bank Failure.
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on the strategic initiatives of Bank One Corporation regarding its foray into the Internet-only banking sector through the establishment and management of WingspanBank.com.
What are the primary themes addressed in this work?
Key themes include the evolution of digital financial services, the transformation of banking from traditional branch-based models to electronic platforms, and the strategic challenges faced by large corporations when innovating in the online space.
What is the main objective or research question?
The objective is to evaluate why a large financial institution like Bank One failed to successfully maintain a standalone Internet-only brand despite clear market opportunities and significant capital investment.
Which scientific methods or analytical approaches are used?
The author employs a strategic management case study approach, utilizing internal corporate data, industry reports, and SWOT analysis to evaluate the success and failure of the digital project.
What topics are covered in the main section of the paper?
The main section covers the history of Internet banking, the implementation of WingspanBank.com, its unique service features, the partnership with the portal Lycos, and the causes for its reintegration into Bank One.
Which keywords best characterize this study?
Primary keywords include Internet Banking, Bank One, WingspanBank.com, Strategic Management, and Online Financial Services.
Why did the alliance with Lycos play a critical role in the strategy?
The alliance with Lycos was intended to rapidly acquire new customers by providing access to financial services directly through a major web portal, aiming to meet the aggressive goal of one million new accounts.
What was the primary reason identified for the failure of WingspanBank.com?
The failure is attributed primarily to unrealistic growth expectations by the parent company and the disconnect between the Internet-only model and the customer desire for physical banking contact.
- Quote paper
- Till Schmaedicke (Author), 2002, Wingspanbank - introduction and analysis, Munich, GRIN Verlag, https://www.grin.com/document/29649
