first wholesale Italian bank: Banca Intesa, The

Global Finance, Summer 2001

INTERNET BANKING AND E-FINANCE

Banca Intesa is the largest Italian banking group and is the result of the merger in January of three major Italian banks: Cariplo, Banca Commerciale Italiana (Comit), and Ambroveneto. The group is now managing the postmerger phase. Several smaller, local banks are also part of the Intesa bank as "federated" entities.

The group has 12 million customers, of which 9 million reside in Italy. There are 6.5 million retail customers. Banca Intesa has five business areas: retail banking, private banking for affluent clients, corporate division for midsize and large businesses, merchant banking division, and international division.

Banca Intesa recently completed the first steps in the process of integration of the three banks, and a comprehensive Internet strategy was defined and introduced to the market at the beginning of last summer. A new division, called Intesa e-Lab, has the responsibility and the budget for all Internet operations across the group. The division has been granted $750 million to invest in Internet initiatives and innovation. Victor Massiah, CEO of e-Lab, explains why the group chose an independent entity for e-operations. "We created a separate company to manage the innovation process," comments Massiah, "because we are in a postmerger management, and most of the effort risked is to be spent in the integration of the three banks, leaving few resources for innovation. With e-Lab, Banca Intesa has created an agile structure to manage the change."

Intesa e-Lab has launched three initiatives to date, mainly in the retail market: IntesaTrade, the online brokerage platform, launched in May 2000, with an investment planned of Euro 50-100 million over the first three years of operations; FundsWorld, a mutual funds supermarket, launched in June 2000, with a planned investment of Euro 40-50 million over the next three years; and Shopla', an e-commerce mall.

However, the group is also committed to investment in B2B exchanges and e-procurement systems and is developing Internet banking solutions for its corporate clients.

Banca Intesa has recently been negotiating with Italian mobile operator Omnitel to create a partnership in a virtual bank, having access to the client base, distribution network, and technology infrastructure of the telecom operator. However, the project has not yet passed the feasibility-study stage.

CONSUMER E-SERVICES

Intesa is running the postmerger management and must integrate the dozen legacy systems inherited by the other "federated" banks. E-Lab is currently working on the launch of a single platform for Internet banking that will be shared by all banks in the group. The solution, scheduled for implementation at the end of 2001, was developed primarily in-house with participation by several Italian systems integrators. At the end of the first quarter of 2001 the group had 150,000 Internet banking clients.

Online brokerage platform IntesaTrade is intended to become the trading platform for all online retail clients of the group, which are currently spread among the individual platforms of each bank. IntesaTrade had 35,000 clients at the end of the first quarter of 2001. The online brokerage platform allows clients to operate in the Italian market, in France, Germany, and on the NYSE and Nasdaq.

I-banking services are currently provided independently on each bank's site. These include Banca Commerciale Italiana (www.bci.it), Banco Ambrosiano Veneto (www.ambro.it), and Cariplo (www.cariplo.it).

FundsWorld is an online mutual funds supermarket. It commercializes a large number of mutual funds of third parties and is offered only to Intesa clients.

Shopla' is an e-commerce mall, developed with the technology of Elsag and Finmeccanica, that provides small companies with applications to create their own e-commerce sites. At the end of March 2001 Shopla' had 400 affiliated merchants.

Intesa has launched a virtual credit card for Internet purchases and is experimenting with mobile payment protocols. During the trial phase there are some financial services on interactive TV. In an agreement with IBM and Italian Internet service provider Tin, Intesa will sell computers for Internet connections through the bank's network of branches.

CORPORATE E-SERVICES

An effort to build a single platform for the entire group is also ongoing in the corporate area. E-Lab is developing a Web-based application for corporate banking, to which remote banking clients will migrate. In the first stage of operations, planned to begin by yearend, I-banking for businesses will include basic functionalities such as account lookup and funds transfer, with credit added later. Eventually, the online banking application will offer leasing and factoring services to corporate clients.

B2B EXCHANGES

In May 2001 Banca Intesa was negotiating its entrance in Answork, the B2B marketplace founded by Credit Agricole (which holds a 16% stake in Intesa), SG and BNP Paribas. The basic technology for Answork is provided by Commerce One.