First Union Readies Internet Strategy
June 9, 1999
ComputerWorld -- Following in the footsteps of its larger banking rivals, First Union Corp., the nation's sixth-largest bank, is readying a newly revamped Internet strategy and Web site as part of a $150 million Internet investment.
When the Charlotte, N.C.-based bank unveils its e-commerce strategy later this month, it will be following the lead of Columbus, Ohio-based Banc One Corp. The nation's fourth-largest bank announced its own e-commerce road map just last month. Both banks have publicly sworn off acquisitions as the road to future growth and are now looking instead to the Internet to fill that role.
Edward Crutchfield, First Union's chairman and CEO, recently said that the days of growing through acquisitions are mostly over for First Union. A stronger Internet and e-commerce presence will be essential to future growth, he added.
First Union currently offers online bill payment, brokerage services, investment account management and personal bank account information services. Under the revamped strategy, it will add more personalization and functionality to its online banking site (www.firstunion.com), especially in the home mortgage and securities trading areas.
Top First Union executives, from the chief technology officer to the director of electronic channels, either declined to comment on the bank's pending plans or didn't return calls. But spiffing up bill paying capabilities and enhancing online trading services are the types of things competitors like Banc One have recently done. Some industry watchers have speculated that First Union may even soon spin off some of its Internet assets into a stand-alone company, perhaps by combining electronic banking and online trading into one company.
"Many banks have everything that discount [stock] brokers have, but they haven't been aggressive in marketing it," said Ron Mandle, an analyst at Sanford C. Bernstein & Co., a New York investment bank.
That's about to change. Over the next six to 12 months, customers will see several new and more robust banking Web sites offering a broad range of investment, loan and deposit products, according to Mandle. The ability to pay bills online will be a key feature of such sites, he added.
"Bill presentment and payment is the engine that will drive that growth, " agreed Robert Landry, an analyst at TowerGroup in Needham, Mass.
<<ComputerWorld -- 06-07-99, p. 14>>
[Copyright 1999, ComputerWorld]
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