Many compliments have flowed Bank One Corp.'s way in the three months since it started its Internet-only offshoot, WingspanBank.com, but bankers are still weighing and debating its implications.

Though executives and strategists at other financial institutions applaud the venture's galvanizing effect, there remains considerable skepticism about its prospects as long as it remains separate from a brick-and-mortar branch network.

"It's a great thing for the industry," said Joseph Sponholz, vice chairman of Chase Manhattan Corp. and head of its Chase.com Internet development unit. "It has really energized people."

"It has been so influential," said Ted Spooner, chief executive officer of Corillian Corp., a provider of Internet banking software. He said a bank in Europe working toward the same end is calling its project Wingspan-plus. "It has become a metaphor for the whole industry."

Among others who gathered last week at American Banker's Online '99 conference in La Quinta, Calif., where WingspanBank.com was one of the most-discussed topics, was Mitchell H. Caplan, president and chief executive officer of Telebanc Financial Corp., one of the first and largest of the Internet-era start-ups -- and presumably vulnerable to Bank One's aggressiveness.

"At first we were concerned," Mr. Caplan said. "But it's one of the best things that could have happened because awareness is growing."

Yet there are questions about Wingspan's prospects for profitability. Critics point to a hefty marketing budget -- said by numerous sources to be $150 million -- as well as a narrow product line and lack of physical branches.

"If you look at the amount of money being spent divided by the number of accounts that will be generated, that single metric alone makes it look unattractive," said Tom Brown, managing director at the New York hedge fund company Tiger Management.

Mr. Sponholz said the lack of a physical presence "is an issue." The branchless model "will definitely appeal to some," he said. "But I don't believe that's the biggest market segment out there."

Nor is Wingspan's product set "as complete as it needs to be," the Chase banker added. With consumers seeking broad Web offerings that include travel services, electronic mail, and chat rooms, "Wingspan is a narrower retail offering than what I think consumers are looking for." Wingspan does offer on-line travel services.

Ward C. Naughton, vice president of the San Francisco consulting firm Sapient Corp., said Wingspan's approach is problematic because in certain categories it sells only its own products. Checking accounts, certificates of deposit, and credit cards are Wingspan-branded. Wingspan's home equity loans are from Bank One.

Mortgage loans come from the aggregator E-Loan; mutual funds through an on-line marketplace run by Pershing, which lists about 7,000 funds; and insurance from InsWeb, which offers a variety of choices.

Mr. Naughton said, "Wingspan is doing better than many other banks in building their on-line brand. But are they really empowering the consumer and building loyalty in a manner consistent with what others such as Amazon.com and Webvan.com are doing in their businesses?"

He said Amazon owes its success to its ability to offer books from a range of publishers.

Jack Antonini, executive vice president of First Union Corp., said Wingspan does not have to sell a wide range of products to be successful. Mr. Antonini, who was First USA's vice chairman and chief financial officer before joining First Union in 1997, said he views Wingspan as primarily a sales vehicle for First USA's lucrative credit card business. And that "works" for First USA even if it "doesn't get a lot of banking customers."

"Two-thirds to three-fourths of Wingspan is a credit card acquisition tool," Mr. Antonini said. The rest of it "is an on-line experiment."

He said that one of First USA's biggest challenges when he headed the company was cross-selling other financial products to cardholders. "We found there was not huge name recognition for First USA," he said.

Wingspan enables First USA to reach people browsing the site, a change from conventional direct marketing tactics. From there, the company can sell other products such as certificates of deposit and mortgages.

He said First Union probably would not go the Internet-only route like Wingspan, partly because it does not have a large credit card business. Another reason is the "good integration and synchronization" First Union has among its existing delivery channels, he said.

For Bank One, the creation of a separate institution is a way to overcome the disparities among systems supporting its traditional banking operations, Mr. Antonini said. Bank One has a history of acquiring banks and letting them continue to run their existing software.

Because First Union has a single, fully integrated system, he said, it is more ready to take a "clicks-and-mortar" approach, offering consistent information and services through automated teller machines, telephones, branches, and the Internet.

"There is so much more money to be made" by cross-selling products to existing customers than by building a new nationwide customer base through an Internet-only institution.

Other banking companies, including Wells Fargo & Co. and Wachovia Corp., have also publicly stated their intention to concentrate on serving current customers through integrated on-line and off-line channels.

Richard M. Kovacevich, chief executive officer of San Francisco-based Wells, said in an August press conference that "our competitive advantage is that our customers have access to all of the channels they want to use."

Wingspan has prompted a few fast followers. In mid-August, Citibank made a no-fanfare introduction of Citi f/i -- the letters stand for financial interactive. It is a work in progress, offering Internet customers deposit accounts, brokerage services, free bill payments, and financial planning services, but not access to branches.

American Express in late July announced its on-line entry, Membership Banking, which will combine banking with other American Express products when it is rolled out in a few months.

Among these mega-size entrants, the numerous Internet banks being introduced by smaller institutions, and the Web offerings of traditional banks, Wingspan faces its share of competition. It is even facing off against its parent company's www.bankone.com.

"We share information on what's working and what's not in terms of customer acceptance and marketing," said Bruce Luecke, president of interactive delivery services at Bank One Retail Group. "We are also competitors."

Jeff Unkle, vice president of corporate affairs for Wingspan, said results so far are "definitely meeting our expectations," though there has been no disclosure of the number of accounts. He said customers are expressing interest in all the products Wingspan is offering.

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