Just weeks after unveiling its online personal finance service, General Electric Co. announced Tuesday that it has partnered with CompuBank to provide personal banking services via GE’s already established GE Financial Network (GEFN).
GEFN, which initially included information on annuities, auto and life insurance, loans and mutual funds, will now offer users the opportunity to open checking, savings and money market accounts, write checks and access funds through cash machines.
Customers will also be able to arrange direct deposits and electronic fund transfers, re-order checks online and use domestic wire service and bill payment features. Through its alliance with CompuBank, GE will offer certificates of deposit and Visa check cards.
Click and Mortar Success Story
GE, considered an “old economy” success story, has made aggressive moves into electronic commerce and may emerge as a model for blending traditional and online operations. Even before GEFN was launched in February, GE had begun to move some of its activities to the Web via smaller-scale sites, which reported more than $1 billion (US$) in online sales of insurance and mortgages in 1999.
This year, the online division of GE projects that it will bring in $2.5 billion, or 45 percent of the company’s total sales. The company reports transaction costs are now a tenth of what they were when appliance store and builders phoned or faxed in orders.
Also, orders have significantly increased. In January, for example, the company’s orders were up a full 20 percent over the same month one year prior.
General Electric CEO Jack Welch once referred to the Internet as “the ultimate boundary buster.” Welch, who has been at the helm of the company since 1981, is making every effort to dispel the myth that GE is an old-fashioned organization.
Under Welch’s watch, GE has moved rapidly toward globalization, and is currently doing 40 percent of its business outside the United States. GE has fully altered its procurement methods by conducting daily Internet auctions with suppliers worldwide.
Wall Street has responded enthusiastically to the company’s progress. After Tuesday’s announcement of the new consumer online banking service, GE stock rose 2 15/16 to 165.
Some analysts predict that the company could reap an additional $4 billion in cost savings and $3 billion in revenue growth this year from its Internet operations. If such figures materialize, GE’s migration to the Internet could serve as an example for a number of old economy companies that are still struggling to find their place on the Web.