Abbey National, whose advertising slogan is 'because life's complicated enough', launched cahoot, its online bank today and found life really could get complicated online.

First day technical teething troubles left cahoot executives with egg on their faces and thousands of prospective customers frustrated in their attempts to open an account. The bank's website crashed at 10am, flitting only sporadically into life during the rest of the day. By 4.30pm, only a few hundred customers had managed to open accounts though the bank's wobbly website.

A cahoot spokesman said the problems were caused by the level of demand and by some technical problems that had not yet been identified. He said that the site was expected to be fully operational within 24 hours and that a notice would be put on the website apologising for the delay once it had become fully operational.

The demand may have been fuelled by cahoot's promise that its first 25,000 customers would receive interest-free overdrafts and credit card accounts until June 2001.

By mid-afternoon, vnunet.com staff had tried and failed three times to open a current account. Each time the online application form turned into a window advising us to call the customer support line after we had completed just two of its seven stages.

When contacted by vnunet.com, helpline staff could only suggest that we try applying again later, blaming the volume of traffic the site was experiencing for our problems.

Prior to launch, cahoot staff were trumpeting the technical capabilities of its service. However, like others before them, it seems that the bank may have under-estimated the back-office power needed to cope with the initial level of customer demand fuelled by a first-come, first-served offer. As well as the overdrafts/credit cards for its first 25,000 account holders, cahoot plans to offer subsidised Wap phones to its first 150,000 customers.

"Cahoot will always use the latest technology," said a spokesman. "It will be the first financial services company to offer an upgrade to GPRS - the next platform to support Wap phones, through its partnership with a leading telecommunications company."

Tim Murley, managing director at cahoot, added: "cahoot is all about doing things differently. Many of the new online banks talk about giving customers what they want and putting them in control, but the reality will show that cahoot is the only one that truly does this.

"In order to achieve this we will not have a few customers subsidising many others but rather will have a profitable relationship with every customer and provide them all with excellent value for money."

The bank's executives say it will take three years to make a profit, but cahoot will have paid for its start-up costs by 2005.