Alliance & Leicester shelves Internet-only bank project

Alliance & Leicester shelves Internet-only bank project

The UK's Alliance & Leicester has pulled the plug on a project to develop a stand-alone Internet bank for mass affluent consumers.

The bank says the decision to stop development was made at a Board meeting on Monday. A&L aims to recoup the £15 million technology spend allocated for the scheme by re-using code at its existing Web site.

Work on the project commenced in May when the bank signed a contract with Compaq and Prologic to develop the technology platform for the prospective wealth management service. Prologic's i-Wealthview software was to provide the main platform for the new bank’s products, while Compaq was contracted to deliver consulting and system integration services, as well as the hardware.

An A&L spokeswoman is unable to confirm how much of the Prologic package was implemented and which elements will be re-used elsewhere within the bank. She says work is progressing with both contractors to identify opportunities for redeployment.

Alliance & Leicester is the latest in a string of banks to rethink plans for a stand-alone Internet service. Allied Irish Banks, UBS, and Lloyds TSB have each recently revisited their Web development strategies in the light of a downturn in the fortunes of stocks and growing scepticism about the likely demand for such services.

Alliance & Leicester, a mortgage bank with limited brand power in wealth management, was also facing advanced online competition from the likes of Merrill Lynch HSBC and Credit Suisse.

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