CompuBank's agreement to provide its banking products and technology to support GE Capital's entry into online banking is likely to be the first of many such agreements for the Internet-only bank.

GE Capital, which already offers its own insurance, mutual fund, credit card, and home mortgage products through its GE Financial Network Web site, announced Tuesday that it would step outside its proprietary-product approach to offer CompuBank deposit products online as well. CompuBank will retain any fees generated from transactions and will control the assets in the consumer accounts.

Eighteen-month-old CompuBank appears to be eyeing corporate newcomers to Internet banking as business prospects. "We are working to add our product set" to those of other financial and nonfinancial companies, said Frank S. Goldberg, founder, chairman, and chief executive officer of Houston-based CompuBank. "We plan to do a lot [of deals]."

Such a business model is getting stronger as the number of nonbanks offering online banking services rises practically daily. Also on Tuesday, AAA, the nationwide association of automobile clubs, announced it would offer bank products over the Internet to its 37 million members nationwide.

In helping other companies get online CompuBank is acting as "an enabler, not a software company," Mr. Goldberg said. "We want to do partnerships with blue-chip companies like GE. We can do these deals and have people in this co-branded environment within a 60-day period."

GE Financial Network of Stamford, Conn., went live last fall without any fanfare. David Frankel, its senior vice president of e-commerce, said it chose CompuBank as its partner after doing due diligence with other Internet banks. CompuBank's business dovetails with the GE unit's goal of "hosting a complete one-stop financial services source online," he said.

An existing relationship between GE Financial Assurance Holdings Inc. and CompuBank may have helped as well. GE Financial Assurance, one of 28 businesses under the GE Capital umbrella, was one of several investors who pumped $36 million into CompuBank during an "angel" round of financing at yearend.

For CompuBank, which will have its name and logo on the GE Financial Network site, the agreement represents a window to new-customer account acquisition. As of Sept. 30, CompuBank had only $7.4 million of assets; USABancshares had $350 million, NetBank $1 billion, and Telebank $4 billion, according to the Federal Deposit Insurance Corp. CompuBank also has only several thousand customers, while USABancshares has 15,000, NetBank 66,000, and Telebank 130,000.

Mr. Goldberg would not say exactly how many customers CompuBank has or what its assets are. The bank has been focusing on building its technology, not marketing, he said. For example, in addition to its deposit product line, the bank has developed payment software called EcommPay for the business-to-business market.

"We have all our technology in-house," Mr. Goldberg said. "We don't outsource it. Our platforms are proprietary to us. They are robust, state-of-the-art, and real-time, so we can execute on these partnerships quickly."

GE Financial Network's banking service will let consumers set up checking, savings, and money market accounts on the Web, pay bills by electronic funds transfer, and arrange for direct deposits. Customers can also write checks, retrieve check images, and access funds through automated teller machines owned by other banks. CompuBank also offers certificates of deposit and Visa Check cards.

Avivah Litan, research director at GartnerGroup, called the partnership "a big score" for Compu- Bank but threatening for brick-and-mortar banks. Banks are "getting hit from all sides" by mutual fund companies, brokerages, and nonfinancial companies that want to offer banking, she said.

GE in particular is a threat because of its intention to be a leader in everything it does, she said. "GE can attract more customers with this service and attempt to be No. 1."

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