What do Wells Fargo Bank, Northrim Bank in Anchorage, and First National Bank in LeMars, Iowa, have in common?
Each maintains a presence - or "site" - on the World Wide Web, the emerging multimedia marketplace of the Internet.
U.S. banks numbering in the hundreds are erecting or improving Web sites every day. Typically, they post information about interest rates and product offerings for anyone with a computer and modem who cares to take a look.
Many bankers who have staked early positions on the Internet believe it will evolve into an important delivery channel. Others say it may prove just a fad, but is still worth testing out.
As bankers become more savvy about the Web, they are seeking to transform their sites into selling tools. But the quality varies greatly.
"There are still an awful lot of sites that look like people took their corporate brochures and just put them up on the Internet," said David E. Weisman, a director at Forrester Research in Cambridge, Mass.
"That might have been O.K. a year ago, but the better sites have evolved to where the content is written to a World Wide Web audience" - in other words, computer sophisticates.
Typical of the more amateurish sites are pictures of bank chairmen beside boilerplate greeting messages. Few denizens of the Web would be tempted to visit more than once.
The more enticing sites offer practical information (like investment tips of mortgage-payment calculators) or quirkier features (like comics, games, or tourist information).
The most sophisticated Web bankers - there are only a handful - let customers check balances, apply for loans, and perform other transactions on-line.
"The key to having a great Web site is to have interactivity with the customer's account," said John B. Lewis, a senior research associate at the Bank Administration Institute. "What keeps you coming back is if you're learning new things every time you go there."
Keeping the sites fresh poses an awkward challenge for bankers, who may feel they are venturing into the entertainment business. Mr. Lewis said the constant need to update and upgrade "places bankers very much in the role of a newspaper publisher."
The BAI keeps a list on the Internet (at www.bai.org/Coolsites/index.html) of all the banks around the world it knows have Web sites. Mr. Lewis said the number was approaching 400, but added, "The number of new sites is growing geometrically, so it's very hard for us to track."
Every day, Joe Koshuta hears from about 10 to 15 banks that are putting up new Web sites. As director of Internet services for Online Resources & Communications Corp. in McLean, Va., he maintains his company's list of bank Web sites around the world.
Last April, when the compilation started, it had about 30 banks. Now it lists more than 240 in North America and almost 500 worldwide.
Mr. Koshuta said Online Resources' bank Web site list, which can be found at www.orcc.com, gets 700 to 800 "hits" - or visits - a day. "I think that's a pretty good number of people out there looking for information about banks," he said.
Some of them are probably bankers surveying the new medium for their own strategic purposes.
"Small banks can put up just as effective pages as large ones," Mr. Koshuta said. "It's really the first time for the little guys to be able to compete with the big guys."
While a small bank might not be able to afford regular television advertising, it can put up an attractive Web site for less than $5,000. "Depending on how creative they are, they can generate a lot of traffic," Mr. Koshuta said.
One community bank that views the Internet as a great equalizer is First National in LeMars, which put up an eye-catching home page this month. The $65 million-asset bank is hoping its rates will draw deposits from around the country.
"We can look down the road and see in five years, in theory, some of our major depositors sitting at home in their loungers browsing the national markets for the best rates," said Mark J. Moir, assistant vice president.
"Rate surfing" is not the Iowa banker's idea alone. It's an expression of the Internet's potential for leveling competitive differences.
Intuit Inc.'s Quicken, the market-leading personal finance software, lists bank telephone numbers so consumers can compare rates. And "intelligent agent" services, which can Web offerings and point consumers toward the best deals, are becoming increasingly common.
"We're seeing people shop checking accounts on a national basis," said Richard K. Crone, an electronic commerce consultant based in La Canada, Calif.
Banks that hesitate to establish a Web presence or that do not pursue what Mr. Crone called the holy grail of transaction capability will be left behind, he said.
"Right now, electronic banking is concentrated on the liability side of the balance sheet," Mr. Crone said. "The answer is to play up the lending side of the house - that is the opportunity here."
At Northrim Bank, which may be the only one in Alaska with a home page, lending considerations were key in the decision to go on the Web.
"We're an aggressive lender, and we have a continuing, ongoing need for deposits," said Lori Philo Cook, the $192 million-asset bank's marketing director. "We're really not trying to get a lot of accounts from outside Alaska, but we thought that in the future we might be able to get CD money this way."
Like many pioneering sites, Northrim's, which went up last May, has drawn more curiosity seekers than depositors. Ms. Cook said she did not know how many browsers had passed through. But she added: "We sure haven't gotten a lot of accounts out of it."
Even at this early stage, the electronic commerce field is so competitive that many banks will not disclose the numbers of "hits" on their Web sites.
Last October, Security First Network Bank of Pineville, Ky., became the first financial institution in the country to adopt the Internet as its primary distribution channel. Though traffic through the bank's site has been good - hits have mounted into the millions, and 40 people a day download account applications, a bank representative said - only 2,000 people have actually opened accounts.
Some of the deposits have been nominal. Though Mr. Lewis of the BAI is a satisfied customer - he said he uses Security First as his primary bank - Mr. Crone said he had deposited $1,000 only as an experiment.
"Somebody could attach a little virus to my keyboard and capture my personal identification number, write a check to themselves, and four days later drain my account," Mr. Crone said.
Lingering security fears have kept most banks from turning their Web sites into full-fledged, if virtual, places of business. But technology experts predict that the climate will change quickly.
"By 2000 the Internet will become the dominant banking platform," predicted Gary Meshell, a managing director at Price Waterhouse.
Among major banks, Wells Fargo & Co. was the first to allay security concerns enough to open its Web site to interactive banking. Last month First Interstate Bancorp became the second.
The response to Wells Fargo's site has been "great," said Gailyn Johnson, a senior vice president. She said the site had resulted in 350% growth in the bank's electronic commerce customer base.
"We are adding more functionality all the time," Ms. Johnson said.
Looking up current balances is the most popular use of the site, Ms. Johnson said, followed by looking at which checks have cleared. The service has eased the volume of calls to the bank's telephone information lines, she said.
"Some customers said, 'This is great - we're glad to see your great concern for security," said Craig Wolfson, a government affairs representative for Wells Fargo. "But there was a small concern among a few customers - the hacker type - who were disappointed that we were so slow in coming back on."
First Interstate spent two years and $2.5 million to develop its transactional Web site, which will be blended with Wells Fargo's when the two banks merge.
Vincent Hruska, a First Interstate vice president, said results the first month were "lower than expected" in part because the bank decided not to advertise the service.
"You can use this as a lesson that active promotion is really critical to a site's success," Mr. Hruska said.
Putting up a Web site does not require the deep pockets of a First Interstate. As interest in the Internet has mushroomed, so have the number of companies selling banks their services as Web designers and consultants.
A typical example is RJE Communications Inc. of Sunnyvale, Calif. Through an agreement with the Independent Bankers Association of America, RJE will set up a bare-bones Web site for an IBAA member for as little as $1,200, plus a $120 monthly service charge. A souped-up package costs $2,000 plus $200 a month.
What do banks get for their money?
"We check any links (to other Web pages and sites) inside the site three times a week, and update it once a month," said Joyce Hlava, president of RJE. "We think it's real important that you keep it current and change things regularly."
Online Resources is planning to take this kind of outsourcing service one step further, offering banks the ability to go transactional.
"We're going to have a service by the end of June that will enable banks to offer banking and bill payment on the Internet," Mr. Koshuta said.
Though transaction capabilities remain distant for most banks, some have found other clever ways to make their Web sites appealing. Bankers Trust includes a "capital markets simulation game." Norwest has "Taena's homework helper," with a list of Web sites that could help students with class assignments.
Other gimmicks include comics, maps, and links to local tourist attractions.
To promote Internet banking, Les Dinkin of NBW Consulting, Westport, Conn., recommends to his clients that their Web sites include special accounts for children.
"Kids tend to be more attracted to this than they are to ice cream," Mr. Dinkin said. "The kids become the hook to get the parents more involved."
