SAN FRANCISCO - While other bankers debate the value of offering wireless financial services amid lukewarm demand, officials of Bank of Montreal and its Harris Bank subsidiary say they are convinced that their trailblazing has put them in a position of strength.

Bank of Montreal was ahead of most North American banks when it started offering wireless banking to its Canadian customers in May 1999. Ten months later Chicago-based Harris became the first large U.S. institution to offer it.

The experience and knowledge the bank gained from its early lead - not how many customers it has - count for everything, said Mark J. Dickelman, vice president of mobile commerce and wireless at Bank of Montreal Group Cos.

"The Bank of Montreal has the best wireless laboratory in the world, and that is a competitive advantage," Mr. Dickelman said in his keynote address at American Banker's mCommerce Symposium on Monday.

Less than 10% of the population used wireless services last year, but that is expected to increase to 25% by 2003, according to Celent Communications, a Boston research and consulting firm. As wireless catches on, $152 billion-asset Bank of Montreal may benefit in much the same way Wells Fargo & Co. has gained from its trendsetting in Internet banking.

In a February report, Credit Suisse First Boston said Wells is among the few banks that are nearing the point of payoff in online banking, thanks to years of heavy investment in Internet technology.

William Randle, executive vice president of Huntington National Bank in Columbus, Ohio, said: "Will wireless affect financial institutions in the next two to three years? Probably not. Do you need to be prepared when it does? Definitely."

So far, Bank of Montreal's experience is bringing dividends in the form of a business it has created with 724 Solutions Inc., the Toronto wireless banking software provider, to offer software and expertise to smaller banks.

Said Mr. Dickelman: "I almost feel like the grandfather, having had the product for almost two years, but that puts us in the best position to say, 'Here is what it takes, and here are the real issues.' That gives us a lot of credibility to other banks."

Bank of Montreal's most recent customer adoption tally, released last summer, said that it had more than 6,000. But Mr. Dickelman contended that customer adoption is not the right metric now. "It is not about the number of customers. It is about creating a market and creating a service," he said.

Wireless customers have exhibited a high tolerance for glitches while helping Bank of Montreal determine the product's functionality, Mr. Dickelman said. "They are partners in learning and defining what the service should look like."

John Sims, president of 724 Solutions, said Bank of Montreal "has learned a lot of things - not just about technology" but about customer behavior.

It has discovered, for example, that 41% of its wireless users access their accounts in the car, 21% at work, 18% in transit, and 10% at home.

But much of Bank of Montreal's focus is on building wireless services for a new audience. This "next generation," Mr. Dickelman said, "will not darken the doorsteps of branches" and will "never have land-line phones."

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