Internet portal Lycos has teamed up the Canadian Imperial Bank of Commerce to form a new bank to be known as Amicus Financial, aimed at the seven million people who visit Lycos sites.
Amicus Financial will initially restrict services to Canada, where it will not charge for Internet, telephone or cash point banking and will offer unlimited cheques and free bill payments as well as retail debit card purchases.
This is in contrast with many traditional banks in the country, where a variety of fees is the norm.
Jake Saunders, of consultancy Strategis, said that both companies had much to gain from teaming up. "Banks do not want to be in the business of solely selling money. By co-operating with an Internet company they can expand into other financial services and mobile commerce," he said.
"Advertising in the short term is limited. Students don't use these companies because of their disposable incomes, but because their friends are doing it.
"Also, Internet companies need a firmer foundation and by teaming up with a real world company like a bank they can achieve more success."