Abbey National bolsters e-banking ambition

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The Independent Online

Abbey National, the retail bank, yesterday claimed it was on target to poach one million new customers from the traditional clearing banks as it bolstered its e-banking credentials with WAP mobile phone deals with Carphone Warehouse and Orange, the cellular phone operator.

Abbey National, the retail bank, yesterday claimed it was on target to poach one million new customers from the traditional clearing banks as it bolstered its e-banking credentials with WAP mobile phone deals with Carphone Warehouse and Orange, the cellular phone operator.

The bank also confirmed that Cahoot, its stand-alone internet bank targeting the young tech-savvy professional market, will go live on Monday.

Ian Harley, Abbey chief executive, poured scorn on Intelligent Finance, the stand-alone bank being set up by its rival Halifax, saying its sweeper account was too complicated for most customers and was unlikely to catch on.

"There is a huge amount of consumer resistance to accounts which pool assets and liabilities," Mr Harley said.

While Halifax is aiming for a million customers within a year and two million by 2004 for the much-hyped IF, targets for Cahoot have been set at 100,000 customers by the end of this year and 300,000 by the close of 2003, the year Cahoot is scheduled to move into profit.

That is in addition to the one million customers Abbey is aiming to have signed up for its mainstream online offering by the end of this year.

Some 120,000 customers have signed up since Abbey's new e-banking service went live a month ago.

Abbey is investing £200m over the next two years in e-commerce, of which £50m is going to help Cahoot get off the ground.

The retail bank yesterday quantified savings of £80m a year from lower processing costs and more efficient procurement, but senior executives said that potential revenue growth was harder to quantify since it remained to be seen which channels customers will prefer to use.

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