John F. Dittman has to be one of the few bankers to have delved into the intricacies of check imaging with his mother.

Mr. Dittman last year took the reins of Cornhusker Bank, Lincoln, Neb., from his mother, Alice M. Dittman, who had guided the community bank for 21 years and remains its chairwoman.

Mrs. Dittman, representing the second generation of family ownership, set Cornhusker in a high-tech direction that included check imaging and a 24-hour telephone service, both firsts in its market.

Mr. Dittman, 35, has thus inherited an unusually aggressive agenda for a $140 million-asset bank. He said he expects his tenure as president and chief executive officer to be marked by "a more rapid pace of change," but he also contends the basis of successful community banking is listening to what customers want.

One reason for the technology focus is that the market in Lincoln - Nebraska's capital and home to the state university-is highly computer literate.

Mr. Dittman brings big-bank sophistication to his job, having spent six years at Northern Trust Corp. in Chicago as a small-business banking officer and two years in Norwest Corp.'s Omaha operations as a credit analyst.

Mrs. Dittman inherited management of Cornhusker Bank from her father, George A. Frampton, who bought it in 1948.

Six years ago she introduced the telephone service, advertised as "Call the Kernel," using an automated voice-response system currently handling approximately 400 calls a day.

In 1994, Cornhusker became the first bank in Nebraska to move to check imaging, bank executives said. The system processes an average of 35,000 items a day.

"We will have on-line banking very shortly, hopefully by the end of the quarter," said K. R. Ward, executive vice president.

The move into banking by personal computer would place Cornhusker among the still rare 3% of banks in that category with less than $250 million of deposits, according to research by Mentis Corp., Durham, N.C.

Mentis has found that 15% of those small banks plan to add a PC service this year.

Mrs. Dittman said the decision to offer PC banking is not driven as much by a desire to innovate as by a need to anticipate what customers want.

A Cornhusker Bank survey of its market two years ago indicated that 35% of households had PCs and 17% had modems, Mr. Dittman said. Since those numbers are likely to be even higher today, the bank wants advanced banking services available.

In the beginning, Cornhusker expects the electronic banking project to be costly, "but ultimately I think it will be a profitable way of doing business," Mr. Dittman said.

"It's a further efficiency," his mother added. "We have a rather sophisticated market in a college town."

"Clearly, they are a very enlightened local community bank and are willing to make the investments and take the risks to remain competitive," said Les Dinkin, managing principal of Westport, Conn.-based NBW Consulting.

Besides the PC effort, the Nebraska bank has been exploring ways to improve back-office operations.

Cornhusker is using character recognition software that automatically reads dollar amounts on about 40% of the checks it processes. On a busy day, this technique can eliminate close to seven hours of work, according to Mr. Ward.

Cornhusker executives don't buy the notion that the larger banks own or control the technology domain.

"I have heard repeatedly that small banks ... can't afford the technology. That's simply not true," Mrs. Dittman said. She added that smaller banks are often in a better position to take advantage of technology.

For starters, since technological projects at community banks tend to be less complex than those at larger banks, smaller institutions can react more quickly to changes in the market.

In addition, hardware and software manufacturers are tailoring more products for the community banking market. "A lot of vendors are very interested in providing technology specifically to community banks," Mr. Dittman said.

Like other banks, Cornhusker plans to use technology to augment, rather than replace, its traditional means of delivering services.

It plans to continue to emphasize branch-based services, but it is updating the look and feel of those offices.

"Branches are changing," Mrs. Dittman said. "They're not the large, impressive, brick-and-mortar structures they used to be."

Cornhusker has six branches. It added two specialty branches last year. One caters to the bank's older customers and is located within a retirement community.

In the other, Cornhusker has sought to broaden services and lower overhead by renting space to other financial service providers in an unusual shared branch. Its first tenants are two financial planning firms, and the bank hopes to add an accounting firm and law firm.

The strategy is in keeping with Mrs. Dittman's emphasis on the bottom line, which she sought to pass on to her son and which balances her high- technology bent.

"I've always said that I just say no until they convince me that we'll make money doing it," Mrs. Dittman said.

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