In a ground-breaking move, the leading consumer Internet bank is moving into b-to-b.
Wells Fargo & Co. in June will launch a full-service corporate Internet banking portal, a financial industry first. The site, Wells Fargo Commercial Electronic Office, will allow its 30,000 corporate clients to do most of their banking online.
Wells Fargo already has a hammerlock on the consumer Net banking space. Last August it became the first bank to reach 1 million online consumer customers; it now has 1.5 million. Executives at the San Francisco-based bank are now gambling as much as $50 million that its portal will be as successful with businesses.
Banks have introduced Net corporate banking features piecemeal since 1997. Most of what's available is cash management related, straightforward and sleepy. Wells Fargo'portal will include foreign exchange, credit and e-procurement.
ON THE ATTACK
The move puts Wells Fargo among a small fraternity of banks that host e-procurement sites. These sites are an example of how banks are fighting to remain relevant by offering more than financial services.
Wells Fargo will market the Commercial Electronic Office in customer publications issued by the bank, said Steve Ellis, head of wholesale Internet services.
For example, an article in the July edition of "Frontiers," Fargo's quarterly business customer newsletter, will detail the portal.
Wells Fargo will also introduce the portal to customers when it informs them of new loans and other corporate banking services, Ellis said.
Wells Fargo is poised as well as any bank to deliver. It spent millions in the early to mid-'90s moving its corporate customers offline to PC-based banking. Then, in 1997, it launched WellsNet, a cash management predecessor to the portal. Customers were mostly happy with WellsNet, as were the bank's executives. As spring 1999 rolled in, it seemed Wells Fargo was settling in, getting comfortable.
It was about then that Ellis, a former Oregon bar owner-turned-Wells Fargo wholesale banker, got inspired. Ellis, who was listening to Sun Microsystems CEO Scott McNealy make one of his patented future-of-e-business speeches at an Atlanta conference, decided Wells Fargo had to build a full online corporate banking package or risk extinction. "I got Internet religion," Ellis said.
Ellis flew back to San Francisco, met with Scott Gable, Wells Fargo's senior VP-wholesale marketing, and planned the bank's corporate Internet future.
Gable, a Wells Fargo corporate banking senior executive, leads the bank's corporate marketing efforts. He is overseeing an initiative to move Wells Fargo's offline b-to-b direct marketing efforts to the Internet.
Gable and Ellis pitched their plan to CEO Richard Kovacevich, who gave his approval.
In July, Wells Fargo created a wholesale Internet solutions group, and Ellis was given charge of the corporate portal. He would not say how much the bank is spending on the effort; Web analysts estimated $50 million.
Twenty percent of Wells Fargo's annual revenue, or about $1 billion, comes from corporate banking. Executives want the site to boost revenue by expanding the bank's midmarket customer base. "We want it to bring significant incremental revenues to the bank," Ellis said, declining to provide numbers or time frames.
The most innovative part of Wells Fargo's portal will be its procurement section, set to go live by August. It will allow users to buy and sell products and services such as computers, maintenance and repair services, and banking supplies.