San Francisco-based Golden State Bancorp, the nation's second-largest thrift company, has jumped into cash management.

The move may add fuel to a trend. Other thrift companies have also started offering such services, which the Internet has made cheaper to provide.

Golden State, which owns California Federal Bank, moved quickly to offer Internet cash management after pegging it as "a good growth business" in a late-1998 strategic review, said Kenneth Coopman, its head of commercial banking.

Mr. Coopman was a cash management executive at Bank of America, for which he had worked 30 years, when Golden State hired him in February. As an executive vice president at Golden State he is in charge of serving companies with up to $75 million of sales.

Cash management services will round out the corporate banking relationships that Cal Fed has developed, Mr. Coopman said. "To be a true relationship bank for our commercial customers, you need to have a cash management platform," he said.

The move by $56 billion-asset Golden State may also be defensive. Commercial banks have focused increasingly on a fast-growing market that had traditionally been thrift territory -- small and midsize businesses.

"A void is appearing in the offerings of some of these thrifts," said Lawrence Forman, a cash management analyst at Ernst & Young in New York. "Now they are filling that."

Cal Fed will offer electronic funds transfer origination, electronic data interchange, and book transfer and sweep account services over the Internet as well as through four commercial banking offices in Southern California. Mr. Coopman said he plans to open several more such offices.

The cash management system was installed in just 90 days. Cal Fed hired Automated Financial Systems of Exton, Pa., for the lead role in managing its development. Automated recommended Atlanta-based Magnet Communications Corp., which provides Internet software to initiate wire transfers and automated clearing house payments. The thrift also selected sweep account processing software from SEI Investments Inc., of Oaks, Pa.

Cal Fed officials have a "tremendous advantage" in building a cash management operation from scratch, said Margaret Scarborough, a director at Magnet. "They do not have the baggage of old systems replacements, and are really starting fresh."

But commercial banks may not relish the fresh start that thrifts are getting.

"My fear would be that they are not going to be rational with their pricing," said David Frady, a cash management banker at Hibernia Corp. in New Orleans. Thrifts "will have to build up volume to help offset the fixed expenses of running the business," he said. "When they come in and start doing that, all they are going to do is drive prices down."

Thomas Gregory, director of decision support at Automated Financial, said the thrift industry's thrust into cash management may rattle bankers' cages but should come as no surprise.

"The cost of entry is not nearly what it used to be," Mr. Gregory said. ?

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