Virtual Bank Spreads Its Wings

Wingspanbank.com is a virtual bank that reminds one of how boxing legend Muhammad Ali described himself: “Floats like a butterfly, stings like a bee.”

The Web site (www.wingspanbank.com) was launched June 24 by Bank One Corp., Chicago, the fifth-largest bank in the United States. Bank One’s backing – along with the speed, craftiness and grace that Wingspan executives say describe the site’s marketing and services – give it a clear shot at powerhouse status.

A combination of traditional and Internet-specialized banking services gives Wingspan an edge, these executives claim.

True, brick-and-mortar banks are setting up Internet presences as a matter of course, and American Express and Citibank are pushing their virtual bank sites into the ring as Wingspan contenders. But Wingspan, a separate line of business from Bank One, can draw on the experience of another Bank One subsidiary, First USA. This pioneer has been marketing Visa and MasterCard credit cards online since 1995. Some 58 million credit card members later, Bank One figured it had learned a thing or two.

One is that financial services work well on the Internet.

“Financial services are a real good fit to be offered online,” says Jeff Unkle, vice president for corporate affairs at Wingspan, Wilmington, DE. “The Internet makes it a little more convenient because you can do transactions when the consumer wants, not just when the bank is open.”

Another is to marry traditional marketing with Internet marketing. Wingspanbank.com debuted with a flurry of broadcast and print advertising, which makes up about 50% of its marketing plan. Online pitches constitute the balance.

Bank One realized it was time to exploit the credit cards’ success, and as with First USA it wanted to use a separate name. “We decided that it was only through creating a separate brand that the long-term equity of what we were doing was going to be realized,” explains Kurt Campisano, senior vice president of marketing and business development. “It was only through a separate brand that we could make our name synonymous with online banking.”

First USA achieved success not only by being online early, but by being aggressive. In 1996, the subsidiary sealed deals with major Internet portals and ISPs, including America Online, Excite and Yahoo!. In all, it has exclusive, multiyear agreements with some 50 different partners to market cards online – and the pacts include marketing for Wingspan.

These contracts give the start-up considerable heft.

“The key thing to keep in mind is they have Bank One behind them,” says David E. Weisman, group director of research at Forrester Research, Cambridge, MA. “This is one of the largest financial institutions in the country trying to make a very strong play on the Internet. They believe the Internet channel is an important part of their acquisition strategy.”

Moreover, starting with traditional media and then adding new media “is the right strategy,” Weisman says. “The Internet is not a great place to build your brand. Using traditional media is the way to gain awareness and build your brand. Then when people come online, if the site’s not fast, navigable and reliable, people will be disappointed. The experience people have with your site is more important than the branding aspect.”

Campisano is tight-lipped about marketing specifics, other than to say that Wingspanbank-.com is trying “hundreds of different types of ads.” The marketing runs the spectrum – text links, banners on partner sites, pop-ups (windows that pop up after a user has clicked on a link and is heading to the new site) and a start into e-mail marketing.

The variety of ads, it is hoped, will reveal what works best. “Just like any other direct marketing channel, if you don’t test rigorously, you won’t get the proper result,” Campisano notes.

The virtual bank also plans on varying its marketing depending on what its testing reveals. “On the Net, more than any other domain, you constantly have to be keeping it fresh in terms of ad media and how you go about marketing,” Campisano says. “It’s a visual medium that has almost no boundaries if you don’t constrain yourself.”

Once broadcast, print and Internet ads have drawn in prospects, Wingspan will launch direct mail and telemarketing programs to cement existing relationships and troll for new prospects.

The database is huge – a major way for Wingspan to sting its competition. Names from the partner sites, combined with First USA’s 58-million-name cardholder database, amount to “an opportunity to market to millions,” Campisano says. Outside lists are being used as well. Prospecting is aggressive, says Unkle, pointing out that “there are 70 million households online that are possible targets.

“We are looking for people who are comfortable doing things on the Internet,” Unkle adds. “The other trait we’re looking for is that they’ve purchased something online or shown an interest in doing that. These are the people who are going to come first to our site.”

Wingspanbank.com customers who have signed up over the last two months are between the ages of 25 and 55, with average to above-average income. They log on from across the country.

The offline ads have garnered 40 million impressions in the last month, Unkle says, but he won’t reveal the number of new customers won. “Response has exceeded expectations and we’re very happy about that,” he says.

Wingspan deals with customer-service issues by staffing a round-the-clock, toll-free customer service line. Online visitors contact staff by e-mail, too.

Also accessible by e-mail is a sort of consumer ombudsman board. Called I-Board, it is comprised of six people from various walks of life, who collect consumer comments and complaints and report back to Wingspan management. “We have a college sophomore, young professionals, an entrepreneur,” Unkle says. “It’s chaired by Frank Cappiello, who’s on the TV program `Wall Street Week.’ The whole goal of this panel is to be the voice of the consumer.”

Wingspanbank.com customers can withdraw money without charge at any of Bank One’s 7,000 ATMs. The machines are mostly in the Midwest and the South; the use of non-Bank One ATMs costs $5 a month.

In addition to the usual banking products such as checking accounts, a Wingspan credit card and CDs, the site offers bill-paying online, online brokerage services, financial planning and a research service called “objectivity tools.”

Objectivity tools is a search function consumers can use to shop for the most suitable mortgage, insurance product or mutual funds by filling out an application. Then, the system chooses the appropriate product and delivers the information. None of the products are Wingspan’s, but they have been handpicked. “The service may not provide 100% of providers of these products, but the choice is the best,” Campisano says.

Objectivity tools offering the “best-of-breed financial services” are indeed what will set Wingspan-bank.com apart, says Weisman.

“With all the information out there, consumers just don’t want to buy the house brand,” he adds. “Services like this allow Bank One to do things that seem very countercultural within the traditional bank. But with Wingspan, they can break the rules.”