With its announcement Thursday that it was folding up WingspanBank.com, Bank One Corp. conceded that its experiment with a separately branded Internet-only bank was a costly test flight.
We dont want the expense of supporting the additional brand of Wingspan, Bank One spokesman Tom Kelly said. Supporting the Internet brand is very expensive, and its not clear if there is a full payoff. To have a separate brand, obviously we need money to support that, and it was hard to make that financial equation work.
Bank One had been considered both crazy and visionary when it introduced Wingspan in 1999 and blanketed the country with pricey advertisements for the remote bank. Observers wondered why the Chicago company would emphasize a made-up brand especially one that would inevitably compete with the Internet division of its brick-and-mortar franchise, bankone.com.
Indeed, by yearend, Wingspan customers will become customers bankone.com customers, and, when the conversion is complete, the Wingspan name will cease to exist.
Bank One tried many stunts to keep Wingspan airborne. It set up Wingspan-branded kiosks in some of its branches. It ran airy ad campaigns targeting women. For a limited time, it offered new customers checking accounts with unheard-of 10% interest rates.
At the same time, it vacillated between throwing more money at the venture and selling it. Before James Dimon came on as chairman and chief executive officer of Bank One in March, 2000, it had hired Morgan Stanley Dean Witter & Co. to shop Wingspan to potential buyers. Mr. Dimon vowed when he came on board that he would hold on to Wingspan, then said a few months later that he would consider dumping it.
Bank One turned down requests to speak to Mr. Dimon or to Michael Cleary, who runs WingspanBank.com and leads the consumer Internet group that Bank One set up last month. Mr. Dimon said in a statement that the groups first major initiative will be to integrate the invaluable experience, insight, and resources of WingspanBank.com into all of our consumer Internet offerings. This will allow Bank One not only to better meet the needs of our customers, but also to accelerate greater efficiency and profitability within all of Bank One s Internet operations.
Mr. Dimon said Bank One had learned a lot from Wingspan about the Internets capabilities and how customers want to be served, and that it will bring those lessons into the daily business of providing the best possible Internet service to all of Bank Ones customers.
While most banks have added Internet arms and many stand-alone Internet-based banks have come into being, Bank One stood alone as the bank that had brought out a full-fledged depository institution under a separate brand. It did so at the height of the Internet euphoria, but nonetheless failed to get the results it had anticipated.
In account sign-ups Wingspan was a failure compared with the main banks online channel. Two-year-old Wingspan had 225,000 accounts at the beginning of the year, while four-year-old bankone.com has more than 700,000 customers, most of whom have enrolled within the last two years. Customers of bankone.com have access to the banks branches, automated teller machines, and the like; Wingspan customers can use nothing but the Web.
Having just an online presence is a disadvantage to consumers, said Jeetu Patel, vice president of research at Doculabs, an electronic commerce consulting firm in Chicago. I never really understood why Bank One created Wingspan. All the features they had at Wingspan they actually already have at bankone.com, and the consumer has all of the benefits of the branch and the Web.
This signals the end of the insanity of 1998 and 1999, said James Van Dyke, a senior analyst at Jupiter MediaMetrix. The Internet-only bank model typified by Wingspan overrides what consumers state they want, he said.
We do believe there is an important place for online-only institutions for niche markets, but not as general-purpose bank, Mr. Van Dyke said. The problem is with most respected institutions, among them Bank One, customers can already get online financial services, so there is not enough impetus to bank with an Internet stand-alone.
Despite Wingspans inability to survive as a separate entity, Mr. Kelly said Bank One did not consider it a failure. We knew it was important to keep trying and learn along the way, he said. We are taking what we learned from Wingspan and propagating it across the company.
Bank One plans to shift Wingspans approximately 100 employees to the Internet services group at the parent institution, and expects no substantial layoffs, Mr. Kelly said.
We learned how ready Americans as a whole are to do all their banking over the Internet, Mr. Kelly said. Not as many are as ready as we would have thought. The question is what would cause people to move an existing account at a long-time bank to an Internet-only bank, and I dont know if we found exactly the right proposition to do that.
Bank One tried something different here that didnt seem to work that well, said Bryan C. Paul, an analyst at PNC Advisors in Philadelphia. I like the idea of using the Internet just as a distribution channel as opposed to a stand-alone entity. That seems to be working better for the other banks. 
