Regional Banking: 1st Interstate Links Tech Units For a Push in Remote

First Interstate Bancorp, Los Angeles, has combined three units into one to promote its alternative delivery channels.

The new unit, called the technology banking group, unites the $57 billion-asset bank's information services, marketing, and day and night telephone banking operations.

The aim in linking the technology units that run alternative retail delivery mechanisms - such as screen phones and smart cards - with promotional staff is to whip up consumer interest in remote banking services.

Customer interest in such products will in large part determine the bank's ability to reduce its investment in brick-and-mortar-based services.

Observers said that marketing is often a missing ingredient in remote banking initiatives.

"Technology is going to have to work hand in hand with marketing to provide the kinds of capabilities and services that customers will really find useful," said Daniel R. Eitingon, executive vice president and head of the new unit.

Prior to his appointment last week, Mr. Eitingon headed the retail banking group and was responsible for all retail banking activities in California.

The new technology management structure - which comes as a four year- old, multisystem consolidation project begins to have its desired effects - will give the bank a "tremendous advantage over most of our competitors," Mr. Eitingon asserted.

The consolidation project aims to convert over 1,100 branches in 13 states to a common banking platform.

Placing management of distinct banking units under one executive is a sign of the importance First Interstate places on the synergy of technology and marketing.

Mr. Eitingon said one benefit of the systems project and organizational changes is that any strategic course decided upon will be "very easy to do over the entire enterprise, as opposed to having to do bank by bank."

Another hope is to reduce the likelihood of bickering among top officials from various units. Any organizational barriers that might exist "will have been torn apart," Mr. Eitingon said.

Edward H. Furash, president of Furash & Co., a Washington, D.C.-based consulting firm, said First Interstate's moves to enhance its retail delivery systems are part of an industry trend in which large banks attempt to achieve economies of scale, decentralization, and autonomy in the marketplace without "losing the sense of intimacy and fast reaction to the market."

"Centralization without communication deadens the ability to deal effectively with consumers," Mr. Furash said. "All banks are trying to solve this problem."

Mr. Eitingon, 49, has been with First Interstate for eight years. He will be responsible for as many as 1,500 employees by the end of this year, and will report directly to the bank's president and chief executive, William E.B. Siart.

Mr. Eitingon began his career as an engineer with Bell Telephone Labs in 1967. He spent eight years with BankAmerica Corp., San Francisco, in several positions, including manager of electronic banking product developments.

He joined First Interstate as a project manager for the "Branch of the Future"- a three-year branch restructuring effort focused on customer service.

In a release, Mr. Siart said Mr. Eitingon's "technical background and retail banking experience at First Interstate are a unique combination of skills that make him the ideal candidate."

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