Y-O-U planned to combine the confidentiality of a Swiss bank account with the global reach of the Internet, vastly increasing Vontobel’s customer base. Instead, it was abandoned in March 2001 after its costs spiraled out of control. The affair highlights the damage that can be done when online projects are just too ambitious.
Vontobel has agreed a settlement with PwC over its abandoned Internet banking venture Y-O-U.
Swiss bank Vontobel and consultancy PwC have finally ended a dispute that has been rumbling since the collapse of their Y-O-U online banking project in March 2001. Vontobel is keeping the lid on the terms of the agreement – much as it would have liked to do with the whole project.
Vontobel claimed that Y-O-U would bring about an evolution in Swiss private banking, since it was to combine the confidentiality of a Swiss bank account with the global reach of the Internet and would have allowed customers to consult Vontobel bankers, buy and sell shares and simulate an investment scenario in a secure electronic environment. Y-O-U aimed to attract 1.4 million mass-affluent clients across Europe by 2005.
Instead, Vontobel spent CHF151 million and then pulled the plug on the project. Since March last year, a number of Vontobel executives have been dismissed and the Vontobel brand has taken a hammering.
If the collapse of Y-O-U and the dispute with PwC highlight anything, it is how not to be too ambitious when it comes to Internet banking. Although all online ventures are to some extent ambitious, especially given the uncertainty that surrounds the dotcom economy, Y-O-U was more ambitious than most. It aimed to offer a bilingual (German/English) site, for example. This, however, proved an insurmountable obstacle for the parties involved.
The moral of the story? When it comes to Internet banking, in many respects simple may be better, in the short term at least.