Retail Banking: Banc One Corp. Invites Competition onto its Site

It was not long after Intuit riled the banking community by introducing "supermarket shelf" financial products and services that Banc One Corp. began crafting its own strategy for positioning the bank as a financial services broker.

And in March of this year, $102 billion-asset Banc One went live with the first phase of its plan: HomeByNet (www.homebynet.com), a multi-company mortgage site sponsored by Banc One Mortgage Corp. Only a copyright tag identifies the Banc One as the site's creator. In addition to Mortgage Explorer, which helps consumers calculate the mortgage they need and can afford, and Mortgage Watch, a mortgage rate monitor service, HomeByNet offers a choice of mortgage products from Citibank, BankAmerica Mortgage, HomeComings Financial Network, HomeSide Lending Inc. and of course Banc One Mortgage.

The project's key objectives, says Donald K. Erling, managing director of Columbus, OH-based Banc One Mortgage, are to deepen the bank's relationship with existing customers, acquire new customers and earn additional revenue on the side. The four outside lenders don't pay anything just to be listed on the site, says Erling, primarily because to attract a high caliber selection of lenders, the bank felt it had to position this as a low-cost distribution method. Rather, the tenants pay per transaction, essentially the equivalent of a finders' fee for each new mortgage customer they get through HomeByNet. "I would assume (the fee) is substantial, given that customer acquisition is high and the value of the mortgage is high," says David Weisman, director of money and technology strategies at Forrester Research. Further, the bank collects subscription fees from customers for its Mortgage Watch services:$29.95 for off-line services and $9.95 for HomeByNet users.

But the sweetest plum may well be the bank's prime positioning to gather priceless information about customers browsing its site. Although the bank can collect only very general demographics about casual browsersoanonymity is a top consumer priority for Web shoppingoonce a customer begins the application process, detailed information about that individual is stored in Banc One's database, available for data mining and other sophisticated marketing analysis. And while each of the four outside lenders can request information about those specific customers who take an interest in them, only Banc One has access to information on customers of all five lendersosomething that could prove invaluable when it comes to cross- selling and customer retention going forward.

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