First Internet Bank of Indiana, though merely the latest in a string of banking companies that conducts all business electronically, expects to stand out from the crowd, said chairman David Becker.

Its main point of differentiation, he said, is the way it processes transactions-in real time. Many institutions operating on the Internet update balances promptly, but transaction details are processed in batch mode for posting at the end of the day.

Real-time posting "is a huge differentiator for us," Mr. Becker said. All of his bank's delivery channels, including phones, automated teller machines, and the Internet, work directly from the main data base, which means balances can be updated as soon as customers complete transactions.

"People prefer to see their activity when it happens, and we think there is huge pent-up demand for real-time banking services," Mr. Becker said.

The backbone of First Internet Bank of Indiana is a system called FiNet from Virtual Financial Services Inc., an Indianapolis-based company Mr. Becker founded. FiNet is used by 13 credit unions handling a combined 737,000 on-line transactions per month.

First Internet Bank received an Indiana state charter in October 1997 and opened for business last month. It offers checking and money market accounts, certificates of deposit, loans, electronic bill payment, credit cards, and debit cards.

Initially, the bank is employing 12 people to handle customer service, from 8 a.m. to 8 p.m. Monday through Friday, but it said it is prepared to expand both its staff and hours when necessary. It can interact with customers by phone or its Web site, www.firstib.com. Customers can use ATMs in the Mac and Plus networks to get cash. Mac ATMs also take deposits.

Mr. Becker said the bank raised $15 million in capital through a private placement. He said he expects the bank will have 10,000 to 15,000 customers and $150 million to $200 million of assets by this time next year. The bank said it needs $50 million to $100 million of deposits to be profitable.

Real-time processing will play a large role in attracting customers, Mr. Becker said, but he added that the bank also plans to use its low cost of operation to offer attractive interest rates. The bank said it expects to spend only $1 per month to maintain a checking account, 75 cents to process a credit card transaction, and a penny to handle basic transactions via the Web.

"Our plan is to be one of the top two or three rate-players in the nation, and that is going to be one of the things that will get the word on the street," Mr. Becker said.

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