Last month, analyst James Marks faced a tough choice: Whether to pursue one of the most prominent posts in banking analysis or join the handful of financial analysts who are blazing new territory, covering companies that specialize in electronic banking.

Mr. Marks - who made his reputation covering thrifts just when investors and the media were beginning to focus on the sector - chose the latter option.

"I put my career on the line," the 34-year-old analyst said. In effect, he turned down an opportunity to apply for the job of senior banking analyst at CS First Boston that was vacated by Thomas Hanley six months ago.

On Wednesday, with Mr. Hanley's old position still vacant, Mr. Marks joined the New York investment banking firm as its first electronic banking analyst.

Although technology is a hot subject these days, it was a bold move on Mr. Marks' part. "This is a very uncertain field," said analyst Anthony Davis of Dean Witter Reynolds.

But Mr. Marks, whose title is vice president, said the market's focus on technology companies presents a great opportunity.

"Offerings by banks you can count on your fingers and toes, but there will be a lot of capital activity with companies involved with technology because they are growing faster and have a greater need for capital," he said.

Kevin Timmons of Friedman, Billings Ramsey & Co., another analyst who has begun to pick up coverage of companies that specialize in new banking technologies, agreed.

"The delivery of banking services is evolving and diminishing the traditional concept of banking," he said. "We are heading into an environment where the majority of people will be doing their banking electronically."

Banks are convinced that electronic processing, on-line banking, and electronic money can cut costs and enhance revenues, said Kawiko Daguio, a payment technology specialist at the American Bankers Association.

Banks are expected to spend $5.4 billion on new discretionary technology this year, up from $4.7 billion in 1995 and $3.5 billion in 1994, said Mr. Daguio, citing an association survey.

"If banks ignore the business of technology, the nonbanks will step up to the plate," he said.

At Hancock Institutional Equity Services in San Francisco, Mr. Marks was known for his thorough coverage of California's major thrifts and banks.

He was a leading expert on the multibillion-dollar "goodwill" lawsuits filed by many thrifts, said one portfolio manager.

Thrifts sued the government after it canceled favorable accounting rules for acquirers of failed savings and loans.

"Jim dug a lot deeper than anybody else," the portfolio manager said. "He understood it so well that a lot of legal teams became dependent on him.

"I think he will do a great job at covering electronic banking. He has always been on the cutting edge of what is going on in banking and knows where the next investment should be going."

At CS First Boston, Mr. Marks expects to initiate coverage on an array of companies involved in the technological future of banks.

"Most of the banks that I will cover have strong electronic financial processing operations," he said. "The rest of the companies are in a netherworld of traditional financial companies and technology."

His coverage list includes Marshall & Ilsley Corp., Milwaukee; Synovus Financial Corp., Columbus, Ga.; and Intuit Inc., Mountain View, Calif.

He will also follow: First USA Paymentech, Dallas; Security First Network Bank, Atlanta; Affinity Technology Group, Columbia, S.C.; Diebold Inc., North Canton, Ohio; and Electronic Data Systems Corp., Plano, Texas.

Mr. Marks plans to augment his coverage by monitoring such technologically advanced banking companies as Wells Fargo & Co., BankAmerica Corp., U.S. Bancorp, and Huntington Bancshares, Columbus, Ohio.

Industry observers note that the group of analysts in this specialty is growing.

"Increasingly, it will be important," said Mr. Davis, who has issued special reports on bank technology in each of the last two years. "There are a lot of technology analysts, but they don't come from a bank analysis perspective."

Analyst Gary Craft at Friedman Billings has been covering bank technology firms for the last year. The company was the underwriter for Security First, he noted.

"It is clear that low telecommunications cost and development of the Internet are leading banks into an era of digital money and involved with electronic commerce companies," he said.

Some bankers believe that they will generate returns if they sink billions of dollars into operations and technology, but they actually will create more expenses, Mr. Marks said.

"Banks should spend as little as possible on technology," he said. He suggests banks wait for outside vendors to develop new technology, then acquire it at "a fraction of the cost."

Mr. Marks has spent most of his career training for the post. His eight years at SNL Securities, which delivers on-line financial information, enabled him to sharpen his skills.

As right-hand man to SNL president Reid Nagle, Mr. Marks developed a reputation among reporters and investors for tracking thrifts and banks that other analysts would not.

"It was a fantastic experience. I got exposure to companies of all services and types," he said.

"But more importantly, I got hands-on experience with technology product design and delivering information on line," he added.

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