Abbey steps up e-bank war with mobiles offer

Abbey National, the high street bank, is planning to hit back in the e-banking wars by offering 150,000 cheap mobile phones when it launches cahoot, its stand-alone internet bank.

Abbey National, the high street bank, is planning to hit back in the e-banking wars by offering 150,000 cheap mobile phones when it launches cahoot, its stand-alone internet bank.

The move follows attempts by Abbey's rival, Halifax, to upstage Abbey's internet banking launch at the start of the week, by announcing its own deal with BT to give away 150,000 WAP (Wireless Application Protocol) phones when IF, its stand-alone internet bank, goes live in July.

The move is the latest salvo in attempts by the big banks to outdo each other in proving their e-commerce credentials.

Abbey, Halifax and Lloyds TSB have all made a string of e-commerce announcements over the past few days and Barclays, which claims leadership in e-banking with one million customers registered to bank online, is planning to hold an "e-day" in 10 days time.

Mac Millington, Abbey's IT director, who will spearhead the bank's attempts to win back the e-commerce initiative from its rivals, said yesterday that selling the phones rather than giving them way made more commercial sense. "Anyone can give stuff away," he said. The price of the discounted phones has yet to fixed.

The Abbey phones, will use GPRS (General Packet Radio Service). Mr Millington believes that GPRS is superior to WAP, which has been taken up in large numbers by banks in the UK. Abbey maintains that WAP has a number of drawbacks, which will ultimately prevent its adoption as the main tool for accessing bank accounts over the internet.

Abbey believes that the key selling point of cahoot will be individual pricing of banking products according to the customer's personal credit profile.

This is in contrast to IT, which is based around the concept of aggregating credit and loan accounts to achieve the best possible interest rate for customers. Evolvebank.com, Lloyds TSB's own stand-alone bank is also promising to offer tailor-made services, although this is more likely to take the form of products designed to appeal to the customer's areas of interest, rather than offering individually calculated pricing structures.

Abbey said this week that it hopes to have five million customers using its range of online services within four years. It is also looking at providing free internet access.

Lloyds TSB said this week it is planning to offer its online customers free access to the internet with Lycos, the internet portal.