Case | HBS Case Collection | November 2000 (Revised May 2002)

FleetBoston Financial: Online Banking

by Frances X. Frei and Hanna Rodriguez-Farrar


As the ninth largest bank holding company in the United States in 2000, FleetBoston Financial Corp. provided a myriad of financial services, including retail banking, loan origination, and brokerage accounts. This case explores how FleetBoston responded to the Internet and the rise of new competition from both within and outside the banking industry. The majority of the case acquaints students with how customers interact with financial services, how these firms make money, and what are their challenges and opportunities. The majority of retail banking customers are unprofitable, making for a unique operating environment in which innovations are consistently aimed at reducing costs. Because customer behavior contributes directly to costs, innovations center on providing lower cost channels for customer transactions. Unfortunately, each new channel increases overall costs, and banks are still faced with reducing costs. In addition, the Internet has given rise to new competitors, many with lower cost structures and revenue potential outside banking.

Keywords: Business Model; Borrowing and Debt; Cost Management; Banks and Banking; Consumer Behavior; Service Operations; Competition; Online Technology; Banking Industry; United States;


Frei, Frances X., and Hanna Rodriguez-Farrar. "FleetBoston Financial: Online Banking." Harvard Business School Case 601-042, November 2000. (Revised May 2002.)