Reynie Rutledge hopes that by bringing the future to his customers in the small town of Searcy, Ark., he may keep the future from passing him by.

Last November, Mr. Rutledge, chief executive of $370 million-asset First Security Bank, put four computer terminals with Internet access in his bank's offices and invited townspeople to come in and explore cyberspace.

"We just felt it was something that our community needed exposure to," he said.

Efforts like Mr. Rutledge's modest, offbeat initiative are imperative if the nation's 9,000 or so community banks are to remain relevant in a future buffeted by technological change, according to bankers and consultants interviewed.

Exploiting the community bank's leadership role to introduce technology to customers, the way Mr. Rutledge has done, is key, these observers say. Others stress finding out more about your current and potential customers and rethinking ways to serve them.

"The small banks that are still doing things the way they've done them for umpteen years are dead," said Vernon W. Hill 2d, chairman of Commerce Bancorp, a $2.4 billion-asset bank in Cherry Hill, N.J. "It's just a matter of time."

"It's not the technology that's missing, but the absence of progressiveness in the community bank leadership," said Arthur Gillis, a technology consultant in New Orleans."

"The new breed of community banker wants everything, and he can push the envelope either by doing it alone in-house or through outsourcers," Mr. Gillis said. "When he can provide every possible service that his customer could want, that's how he'll survive."

Mr. Rutledge's bank offers no products over the Internet yet, and he doesn't know if it ever will. But he does know that a business-as-usual approach doesn't work anymore.

"Computer banking isn't for everybody, and we'll never stop meeting with people and saying hello to them on the baseball field," he said. "But at the same time you can't keep your head in the sand and ignore what's going on out there."

And much of what's going on involves the use of personal computers. More home PCs than color televisions were sold in this country last year. Today, more than 20% of all households own a computer with a modem, a number predicted to grow to 55% by the year 2000, according to Jupiter Communications, a New York multi-media research firm.

Given the more computer-savvy populace, Jupiter also predicts that the current 754,000 electronic banking accounts will skyrocket to nearly 13 million by the year 2000.

Other firms, such as Mentis Corp. of Durham, N.C., predict more modest growth figures, but all seem to agree that the technology will dramatically transform the way banks deliver their services.

This new world of electronic banking is being braved by about 200 banks, nearly all of them regional-size or larger. And according to consultants, it makes sense that small banks should allow the big ones to be the pioneers - because the large banks can afford it.

But if electronic banking does take hold in the marketplace, the small bank has to be able to offer it before its customers look for it elsewhere.

Community bankers pride themselves on knowing and responding to the needs of their customers. Indeed, they consider it a key tactical advantage in their competition against larger, more impersonal bank and financial service organizations.

But how well do these small bankers really know their current customers? And, more important, do they know anything about the customers of tomorrow?

"I'm most frustrated with a bank that says their customers don't want an ATM card," said Diane Casey, national director of financial services at Grant Thornton, a Chicago-based consulting firm. "I say, 'Excuse me, but do your customers travel?'"

She added, "Many times when you ask them who their most profitable customers are and who makes up that segment, they say, 'Well, I just know.'"

That kind of smug self-assurance from bankers won't cut it in the future and might not suffice even today, she and other consultants said.

A Gallup poll released by the American Bankers Association last fall found that one-third of those bank customers interviewed were only "somewhat satisfied" with their bank, ripe pickings for new competitors. Those malcontents are also the banks' most profitable customers - high- income, well-educated, and young.

Of even greater concern is the generation gap that community banks will have to cope with in the next decade, experts said.

Most community bank CEOs are well attuned to the 50-and-over age group, because that's their own generation. But the next generation of customers is a different story.

In the year 2005, more than 34% of the country's population will be 25 to 49, according to the Census Bureau. They will be computer literate, accustomed to convenience, more sophisticated financially, and unconcerned with such antiquated notions as loyalty.

"Community banks are still catering products to the 50-year-old male, not to the next generation," said Chris Hargrove, an analyst at Professional Bank Services Inc., in Louisville, Ky.

But some small banks are making it their mission to understand their customers, old and young alike.

Anthony S. Abbate, chief executive of $490 million-asset Interchange Bank in Saddle Brook, N.J., has made this his bank's priority.

For the past 15 years, Interchange has developed a data base to show exactly which customers might be interested in each of its products.

With a consultant, the bank surveyed the surrounding Bergen County to find out the composition of households and the life stages of family members. The idea was to help the bank market its products more effectively and develop new ones to meet customer tastes.

"We're still learning," Mr. Abbate said. "We're still working with it. There's so much information that comes out of that program that it's overwhelming."

Once known, the customer is better served - which is what distinguishes community banks from their faceless competitors.

But current trends question just how important personal service will be for the next century's bank users. Even for today's customers, it ranks only second in order: Just 19% of those interviewed in the ABA's Gallup poll saying it was the primary reason they have maintained their relationship with their bank.

The No. 1 reason, top motive for 39%, was convenience.

Mr. Hill's New Jersey bank tries to deliver its products any way its customers want. In just five months, for example, its new home banking product has attracted more than 10,000 users. That's 5% of the bank's customers, a higher percentage than most big banks can boast.

"We're not going to force the customers anywhere, like the major banks," said Mr. Hill. "Convenience is what we're selling."

Personal service will still be important, but will exist in a different form, consultants said. A lobby full of customers, with smiling tellers passing out lollipops to children, is already a scene so rare as to be an anomaly.

"The community bank of the future could be in an office park," said Michael S. Dusche, sales manager of Microsoft's new community financial institutions division. "Lobby traffic will be marginalized.

"But the basic tenet of being a pillar in the community will not change. No one else has that localized sense."

Personal service could mean responding to an E-mail at 1 a.m., rather than sitting down with a customer in an office, experts said.

"Everyone wants attention when they have a problem," said Phoebe Simpson, an analyst with Jupiter Communications. "It's a matter of cutting down on people in front and requiring a slightly different skill set, but it's not an unfathomable jump. Machines cannot replace customer service, no matter how glamorous it sounds."

But machines can make the concept of "local" irrelevant.

The political melees across the country in the past two years over interstate banking and branching legislation will seem frivolous in the next century, some said. A visible presence will still be important, particularly for small-business customer. But if computerization does continue apace, a stately headquarters or branch on Main Street will no longer be necessary.

Security First Network Bank, for example, the first bank to operate solely on the Internet, is run out of Atlanta. It's founder, Cardinal Bancshares, which recently spun off the company, is in Louisville, Ky. Its customers, about 3,000 to date, are in all 50 states and abroad.

One of them, Vincent Meyer, is a medical student living on the island of Grenada, just off the coast of South America.

"I've sent them E-mails at all strange hours of the day and even on holidays, and have gotten responses back within a half hour," said Mr. Meyer. "They are very accessible - which is what my bank located around the block from my house in New York was not.''

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