Banc One Corp. and the E-Trade Group have agreed to offer on-line financial services to each other's customers.
The companies have begun establishing Internet links that would give Banc One customers access to E-Trade's on-line trading capabilities. E- Trade customers would, in turn, be able to use Banc One's Web-based offerings.
The deal will also create a cobranded E-Trade credit card to be issued by First USA, which Banc One is acquiring.
The Banc One/E-Trade partnership is meant to help the companies offer the type of one-stop shopping for which more financial services companies.
"This fills a gap, as we do not have on-line trading capability," said Bruce A. Luecke, general manager of Banc One's interactive services.
"If I can refer customers to a good-quality provider, I have kept the customers as well as the accounts they have," Mr. Luecke said.
Christos M. Cotsakos, president and chief executive officer of E-Trade, said, "We envision the consumer being able to access, control, and document his or her banking and investment activities through a single on-line source."
Banc One and E-Trade rank among the most progressive on-line providers of financial services.
The Columbus, Ohio-based bank has been originating mortgages over the Internet for more than two years and is one of two institutions testing Integrion Financial Network's Internet banking system.
E-Trade, based in Palo Alto, Calif., is one of the leading providers of on-line trading. About 60% of the trades done by its customers travel over the Internet. The rest use other electronic channels, such as phones or direct-dial computers.
Piper Jaffray Inc. in Minneapolis puts E-Trade's share of the Internet trading market at 13%. Fidelity Investments also has a 13% share; Charles Schwab & Co. has 35%. But E-Trade is gaining momentum faster than any other on-line trading company.
Though E-Trade and Banc One expressed admiration for each other, both pointed out that their arrangement is nonexclusive.
E-Trade plans to announce other co-marketing arrangements soon. Steven R. King, vice president of strategic alliances for E-Trade, said there are a "handful of very prominent banks" that could improve the value of E-Trade to its customers, and the company is exploring partnerships with them.
He said E-Trade will choose partners carefully, guarding against confusing or overwhelming consumers with too many choices.
Observers said the deal is evidence that barriers between banks and brokerages are finally beginning to crumble.
"Instead of buying brokerage firms or building their own, this represents a third way for banks," said Bill Burnham, senior analyst for electronic commerce at Piper Jaffray.
"Banks and brokerages working together has always been a little like oil and water," each afraid the other will steal its customers, Mr. Burnham said. But many competitive concerns take a back seat to offering all the services customers demand, he said.
The companies will begin linking in the next several weeks, officials said. Terms of the cobranded credit card will be unveiled within 60 days, they said.
