On June 28, Bank One announced that it was closing its expensive e-finance experiment, Wingspan Bank.
Wingspan Bank was launched in 1999, amid much hoopla, as a pure Internet bank by the First USA credit card division of Bank One. But after its first 12 months in operation, the bank had just 144,000 users -- a fifth of what Bank One had for its own Web site. Wingspan's ad budget was slashed, the CEO departed, and then the bank was put up for sale. With no buyers stepping forth, Bank One decided in June to clip Wingspan's wings -- permanently.
Current customers will be migrated to Bank One's own online banking products this fall, but many will likely jump ship well before that point, once they get wind of Bank One's fee schedule. At Wingspan Bank, customer received ATM usage fee rebates, interest checking, and free online bill payment if you had $1,500 on deposit. At Bank One, their Net Checking account costs $5 per month if you don't have $500 on deposit. Bill payment is an additional $4.95 for all customers, and forget about earning interest.
Based on the horror stories that many CompuBank customers experienced in the aftermath of the NetBank acquisition, let's hope that Bank One can handle the migration of Wingspan Bank customers with a bit more grace.
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