Former B of A Chief Eyes Piece of Payments Pie

Four months after being forced out as president of BankAmerica Corp., David A. Coulter is starting a venture that he said could take business away from banking companies.

He and six or seven other people are in the early stages of developing innovative, high-technology payment services, Mr. Coulter said Monday.

"If we use technology to enter the value chain and create a commodity, there (is) a way to compete with the transaction platforms out there," he said, without going into great detail.

It was Mr. Coulter's first public appearance since his ouster in October, a speaking engagement at an insurance industry gathering sponsored by the investment firm Russell Miller Inc.

Mr. Coulter, who was keenly interested in payment systems while at BankAmerica, referred to his start-up as "Dave Coulter LLC" and said he hopes it can offer ways to conduct financial transactions without banks.

"I could draw you a picture of a transaction platform for financial products that doesn't necessarily have the word 'bank' in it," Mr. Coulter said.

"I don't pretend to be saying that in a month we're going to have an idea that challenges and worries some of my ex-colleagues," he said.

But observers said that Mr. Coulter's strong reputation alone should help him.

"He'll be able to leverage his experience and contacts to his advantage," said Joseph K. Morford, an analyst with First Security Van Kasper.

Mr. Coulter "has been a real visionary in this area of the industry," said Diana Brown, vice president of financial services at Scient Corp., a San Francisco-based e-business strategy consultancy. "Given his experience and credibility, this will be a very interesting thing to watch."

The firm seeks to take advantage of what Mr. Coulter referred to as a "strategic inflection point," when all financial service companies are facing fundamental changes and major competitive pressures.

The insurance industry is not immune from that, Mr. Coulter said.

Partnerships for selling insurance products to bank customers have generally not been very attractive to the big players in his former industry, he argued. After discussions with several insurers while he was at BankAmerica, Mr. Coulter said, he concluded that insurers wanted to pay banks a meager sum to have access to a huge and powerful customer data base.

"That doesn't work for me," he said. "I want more of the pie."

But David Weymouth, president and chief executive of Talbot Financial Corp., an Albuquerque insurance firm, said bankers' expectations for partnerships are often unrealistic.

"Banks want to get into the business on the cheap, but then they want returns as if they have been doing insurance for years," said Mr. Weymouth, a former banker.

Mr. Coulter made only fleeting references to the Sept. 30 merger of BankAmerica with NationsBank Corp. He left the merged company after BankAmerica announced losses related to its relationship with a New York hedge fund firm, D.E. Shaw & Co.

"People have a funny way of screwing things up in a big combination, and, believe me, I can tell you about that," he said.

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