Sovereign Bancorp has farmed out the management of its Internet-based banking services to Electronic Data Systems Corp.
The Wyomissing, Pa.-based banking company joins a growing number of financial institutions in outsourcing Internet-related tasks. The terms of the deal were not disclosed.
"We have formed an Internet technologies strategy that allows Sovereign to focus on its core competencies," said Marshal Kern, senior vice president at $10 billion-asset Sovereign.
EDS is providing the technology and consulting services the bank requires to run a full-time interactive Web site.
"We are hosting it, securing the site, and making sure that it is all up and running 24 hours day, seven days a week," said Mike Battaglia, business development manager at EDS.
Sovereign passed those responsibilities to EDS after scrapping an earlier Web site because some found its design unappealing. The earlier version used on-screen images of an ice cream sundae to lead customers to various services.
"Financial institutions will continue to pursue ways of communicating with their clients and ways of extending their product distribution capabilities using alternative technologies," said Bobby Grisham, president of EDS' banking and securities business unit.
Sovereign has made a name for itself with its Internet offerings. It was among the first to provide low-cost Internet access through an alliance with Netcom On-Line Communication Services Inc., San Jose, Calif.
Since last May, the bank has also offered on-line investment planning services to its 500,000 customers, aiming particularly at members of Generation X.
Mr. Kern said Sovereign's second-generation Web site can "take applications for loans and savings products."
"We try to make it deep," he said. "It's not just information."
In addition to the Internet services, EDS provides systems support for the bank's extranet, which since February has been in a test phase with 12 wholesale mortgage brokers.
The extranet is a network that gives select third parties access to the bank's private intranet.
Brokers are using it to download and print forms and other financial documents. Bank officials said such services could eliminate $100,000 in annual fax-related costs.
"Every day the bank takes one little rate sheet, and it fax-blasts it out to all these mortgage brokers," Mr. Battaglia said. "Now the bank can get rid of those costs."
Mr. Battaglia said the extranet service eventually will be extended to more than 500 wholesale mortgage brokers nationally.
Sovereign, which has 136 branches across Pennsylvania, also enlisted Michael J. Motto Advertising Inc. of New Providence, N.J., for help in designing its Web site's graphics.
Another company, Icon Services Inc., of Reading, Pa., was enlisted to develop certain applications, including computer-based training programs over the intranet.