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Case Study for Wingspanbank.com.

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Introduction

Case Study for Wingspanbank.com 1.0:Problem Identification Wingspanbank.com was launched on June 24, 1999. It was a freestanding Internet bank under the auspices of the First USA division of Bank One. It was an Internet-only bank that marketed itself with the claim, "If your bank could start over, this is what it would be.? Created in a record four months and launched with a huge advertising campaign in year 1999, Wingspan provided one-stop shopping for financial services. At first glance Wingspanbank appeared to be a hugely successful startup, and in a way, it was because it had met virtually all of its goals and led the industry. However, the First USA division had performed poorly since then, it suffered $70 billion in outstanding receivables and shares of Bank One had fallen more than 40 percent since May 1999. Finally, "Wingspanbank was downgraded to be a test lab because it didn't attract enough customers? Bank One officials said in September 2000. But was Wingspan, a standalone Internet bank, a flawed business model or a good idea doomed by circumstance? The answer may be both. Internet pure plays don't have staying power, especially in banking. "Pure online banks are beginning to look like failed dreams,?said a report issued by Newton, MA-based Meridien Research. However, the bad management in Wingspanbank also contributed to its failure. The internal problems included the direct competition between Wingspanbank and its parent company ?Bank One, frequent system failure, huge marketing campaign, the lack of planning, and the ongoing management turmoil within its parent company. The problem Wingspanbank faced was it should find option(s) that it should adopt to be a valid strategic model to stay in business, to solve the problem of management, to take full advantage from its opportunities to attract and retain customers. In the analysis, in-depth insight will be given to examine the situation of Wingspanbank and recommendation will be given to Wingspanbank or Bank One in order to improve the situation of the business. ...read more.

Middle

The partners of Wingspan were the best service providers for each product area. And the alliance with Lycos represents the future direction. Weakness ?Incomplete separation from Bank One. The unclear role of Wingspan in Bank One might lead to weak structure. ?Frequent system failure. The technical failure such as unavailability of server led to unsatisfied customers who were disillusioned by technical glitches in handling transaction. The system failure might also generate the worry about security and privacy. Opportunity ?The explosion of Internet made more and more people feel more comfortable with this technology and e-commerce. ?The change in life style to simplicity and convenience. ?Technology progress in terms of payment processing, authentication, network accessing, database capacity and flexibility, online marketing technology. Threat ?Entry of other giant traditional banks and non-bank into Internet banking industry. ?The growing of wireless banking and other substitutes. ?Reputation risk result from concerns of security and system failure. ?The speed of negative information flow over the Internet might result in loss of reputation and customers. 2.5: Financial Analysis Being a pure online Internet bank, the overhead cost of Wingspanbank.com was low. This is why pure online bank can provide customers with better price and higher interest rate. However, Bank One, which didn't break out revenues and expenses from Wingspan in its financial fillings, was believed to have spent at least $150 million promoting the Wingspan brand. Moreover, the collection of account receivable was not efficient as First USA division suffered $70 billion in outstanding receivables. In addition, shares of Bank One had fallen more than 40 percent since May 1999. 2.6: Wingspanbank.com's Strategy In its advertisement, Wingspan declared: "If your bank could start over, this is what it would be.? The strategy of Wingspan included all of the following: ?Wingspan was Bank One's standalone online banking effort. It was a "one-stop-shop?for financial services. It was a pure-play Internet banking without a physical presence. ...read more.

Conclusion

If the customers are converted effectively, they will be happy and loyal to the site; otherwise, the reputation and trust of the bank will be destroyed. There are some subtasks should be done in these three months: ?Official announcement of the transformation ?Official announcement should be posted in Wingspanbank.com and Bankone.com ?Official letter about the transformation and detailed description should be sent to each customer ?Toll-free telephone lines should be open for customers?concerns ?Customer service centers should be open in the physical locations of the Bank One branches to allow customers asking for information. 4.22: Long-term plan: The long-term plan will cover the tasks to accomplish in the coming 18 months. Task #1: Make Bankone.com an integrated part of a multi-channel delivery strategy. The online capabilities of Bank One that gained from the operation of Bankone.com should complement other channels without sacrificing speed and simplicity. As customers interact with Bank One online or off-line, they should be presented with a consistent customer experience. Task #2: Continuously improve the site with new technologies. Security level should be increased continuously and the structure and design of the site should be improved to increase speed and convenience. The site should be able to provide the same level of service or better than that is offered through traditional channels. And online self-service capabilities should leverage new technologies such as wireless account access. Task #3: Implement the CRM approach to the overall operation of the bank. The online presence should utilize technology such as log files, data mining, intelligent agents etc to track the activities and preference of customers in order to provide more personalized services. It should also go beyond the basics to differentiate overall product offerings. A board range of well designed and implemented value-added services and tailored solutions should be provided according to customers?needs and wants. 5.0: Conclusion While the Internet is a potentially profitable delivery channel, bank ventures cannot ignore the Internet. Wingspan's story should not deter bankers from pursuing Internet strategy. It should, however, offer a valuable lesson today's fast-changing economy: multi-channel and customer-focus is the way to go. ...read more.

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