Wells Says Its On-Line Users Will Number 2.5M by 2002

Wells Fargo & Co. says it expects to boost its Internet banking customer base, nearly the biggest in the banking industry at 930,000, to 2.5 million by 2002.

The San Francisco-based bank has been a leader on the Internet in more than just customer acquisition.

It says it was the first bank to process secure Internet transactions, back in 1995. Now it guarantees its Internet customers 100% coverage of funds improperly removed.

Last summer it began offering real-time home equity loans over the Net. And this year it had another first, allowing individual retirement accounts to be opened through its on-line brokerage service.

As for electronic commerce, Wells put Virtual Vineyards, an Internet- only winery, on the Web in 1995. Since then, it has helped put 2,500 businesses on-line.

In whatever Wells does, its goal is to "do it clean and do it right," said Michelle R. Banaugh, vice president of electronic commerce. The newly formed e-commerce unit is responsible for guiding the bank's aggressive strategy.

Wells recently surfaced as the only bank on a list of 50 Web sites and services ranked by customer loyalty. Media Metrix Inc. of New York defined loyalty as the average number of days a person returns to a site in a month.

On a list dominated by various America Online channels, Wells ranked 26th, at 4.8 days a month. The only other financial services firms to make the list were Charles Schwab & Co., at No. 20, and E-Trade Group, at No. 36.

A major focus for Wells is using its Internet expertise to serve small businesses.

"We are experts on the Internet and in understanding company needs," Ms. Banaugh said.

Small businesses "need the how-tos" to get started on-line and may have difficulty even identifying them, she said.

The bank has been enhancing the Internet services it offers small businesses. It just began using GTE Cybertrust's digital certificates to secure the accounts of Internet merchants, eliminating the need for them to find their own security providers.

It also has added a currency transaction tool it developed to seamlessly process payments made in different currencies. Previously, the system would have had to convert currency payments into dollars, exposing the merchant to fluctuations in foreign exchange rates.

And the bank is developing a unified set of services that would let small businesses help themselves get on the Internet. Integration would create a "dynamic self-select and self-service process," Ms. Banaugh said.

Until that service is developed, Wells says, the company will continue to recommend partners from an established network of Internet address providers, site developers, hosting companies, and inventory managers.

Wells is also gearing up to tackle the legal and regulatory issues related to offering electronic commerce services to international companies wanting to do business in the United States, Ms. Banaugh said.

She added that Wells is open to partnerships that would "merge the competencies of banks and nonbanks." On the consumer side, for example, Wells added a service on its Web site that lets customers order, pay for, and send flowers for Mother's Day.

"Wells wants to deliver the whole package," Ms. Banaugh said.

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