Magazine article American Banker

Chase Forms Unit to Speed Its Progress on Internet

Magazine article American Banker

Chase Forms Unit to Speed Its Progress on Internet

Article excerpt

Chase Manhattan Corp. has joined the vanguard of institutions addressing organizational issues related to the high-stakes Internet business.

In a memo released to employees last week, William B. Harrison Jr. said the bank would form Chase.com, a unit devoted to managing ventures in new technology and working with the bank's lines of businesses to tailor products and services for the World Wide Web.

The announcement, a highlight of Mr. Harrison's 21-day tenure as Chase's president and chief executive officer, indicates the importance the $361 billion-asset bank is putting on electronic commerce.

"We are not moving fast enough" on the Internet, the memo read.

Other banks have built similar units to begin reforming methods that have become ingrained. In recent weeks, Mellon Bank Corp. and First Union Corp. created high-level positions for electronic commerce executives.

"You don't want to tie down Internet growth by tying it to legacy businesses," said George A. Bicher, bank analyst at Deutsche Banc Alex. Brown. "You have to have flexibility and move with speed and not be tied up in bureaucracy."

Laura Klein, managing director of the eStrategy Executive Council, a group formed by Mainspring of Cambridge, Mass., said the challenges large institutions face "are not about legacy systems, but about legacy culture, processes, and business models."

She said the 40 electronic commerce executives from various industries who compose the eStrategy forum have identified the typical largeinstitution budgeting process as a roadblock to flexibility. …

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