The increasingly competitive nature of business banking puts a premium on technology to improve customer satisfaction, boost revenues, and keep costs down. And that has brought an explosion in personal computers for connecting banks with their business clients.

The American Banker technology survey indicated that 63% of the top 300 banks offer businesses access to their banking information via personal computers. Well over 90% plan to offer the information services by 1998, typically including account balances, statements, and electronic funds transfers.

What's more, on-line corporate banking - the equivalent of home banking for wholesale customers - is getting easier and cheaper for more small banks and businesses.

George Hart, president of Harbinger Corp., an Atlanta-based supplier of cash management software packages, said he has seen a marked increase in his business this year.

About 25 banks are resellers of Harbinger's systems, including BankAmerica Corp., Barnett Banks Inc., and smaller customers, such as United American Bank of Memphis and Stillwater Bank and Trust Co., Stillwater, Okla.

"These types of services . . . are not expensive any more" Mr. Hart said. "It's not a big deal to offer them."

Also hot in the corporate realm, according to the survey, is financial electronic data interchange, or the exchange of payments and related documentation in standard computer formats.

More than 40% of the top 300 banks plan to offer financial electronic data interchange by 1998.

"We expect a lot of growth among companies in financial electronic data interchange in the next three years," said Maria Erickson, director of corporate services at Payment Systems Inc., which conducted the survey.

The economics become especially favorable, she added, if "you consider the development of Internet-based financial EDI services."

Among a new breed of cash management services, integrated payable and receivable services have garnered a lot of corporate attention lately, especially among larger and middle-market companies.

Integrated payables are quickly growing in popularity from major banking companies like Chase Manhattan Corp. and Wachovia Corp. The service enables disbursements using several payment systems to a corporation's trading partners. An accounts payable department can unload the entire process to the bank.

The bank, in turn, uses combinations of checks, wire transfers, automated clearing house payments, and financial electronic data interchange, depending on the technical capabilities of the receiving corporation's bank.

Michael Starr, senior vice president at Wachovia, said, "It's profitable for us because it increases the volume of activity, and it also gives us a good opportunity to go out and potentially market our travel and entertainment and procurement cards."

NationsBank Corp., meanwhile, is honing its integrated receivables, funneling payment information from various systems to customers "in a single stream of information," said Connie Beck, executive vice president and group executive of global treasury and trade.

Also increasingly popular on technology's wholesale side are image- based account statements, check truncation, data storage on CD-ROM, and positive pay.

Image-based positive pay, part of a trend toward streamlining check collections, will increase to 31% in 1998, up from only 9% of banks currently offering it, the survey said. "Corporate customers are really willing to pay up for the service," Ms. Erickson said.

As imaging technology's costs become more affordable, smaller banks are getting involved. Teena Stoneking, assistant vice president at United Southern Bank, Umatilla, Fla., said the $170 million-asset institution began offering imaged account statements this year.

Imaging is seen as a way for United Southern to keep its 1,700 business customers. But the industry's biggest banks are capable of making capital expenditures that could leave smaller players in the dust.

"The amount of capital investment . . . will break the back of all but the most significant players," said Anthony J. Carfang, partner with Treasury Strategies Inc. "The largest six to eight banks will be the survivors" in corporate services.

Mr. Carfang compared large banks' spending levels with the U.S. military buildup during the cold war. The survivors will have to invest hundreds of millions of dollars in technology over three to five years if they hope to keep pace.

"It's not clear who is going to have the stomach for this," the Chicago-based consultant said.

The typical regional bank's expenditure on technology and infrastructure for its corporate business ranges from $20 million to $50 million annually, Mr. Carfang estimated.

But NationsBank anticipates spending about $500 million this year just for project-related enhancements and new-product developments across all business lines, including retail. Other pieces of the operations and technology budget, including systems maintenance, would drive that figure above $1 billion, Ms. Beck said.

That suggests only a handful of banks can hope to be dominant in treasury management.

The market is consolidating among fewer players "because the little banks do not have the horsepower to offer these services," said Leon Majors, a management consultant at Payment Systems Inc.

"To be in the business, you have to spend the big dollars," added Wachovia's Mr. Starr. He sees the business being reduced to "six to eight players, and quite frankly, we plan to be one of those."

He emphasized there is much more to it than transaction processing: "There is still an element of relationship, consultative sales, and value - meaning you are bringing more to the table than simply processing these people's work."

Mr. Carfang sees an oligopoly developing, with market participants migrating toward narrow specialty areas that do not directly compete with one another. For example, Citicorp has focused on international corporate transactions, NationsBank on the domestic market, and Chase Manhattan Corp. on investment activities. He doesn't see them challenging State Street Boston Corp. and Northern Trust Corp. in custody services, a business "those banks own."

Likewise, he said it would be "foolish" for Chase to set up domestic lockbox from scratch," just as it would be misguided for NationsBank to attempt a worldwide branching network because "Chase and Citibank already own that."

"There is no question that we expect to see less and less competition for the market that we intend to service," said William Garry, senior vice president at Chase.

Chase plans to rip up the demand deposit accounting system in its insurance and funds management sector to build a new one that integrates asset management, custody accounting, cash services, and electronic banking on a single platform.

"That is a $100 million sector for us," Mr. Garry said. "We can afford to spend $10 million or $15 million to revolutionize how we serve that market . . . . We don't think anyone else will have deep enough pockets to do that kind of thing."

Whether an oligopoly materializes or not, community banks must still find ways to retain business accounts and solidify corporate relationships. Mr. Majors said expanding private and personal banking services that appeal to executives is one way to do that.

But he added, "there are pieces of a company's business that small banks just can't handle, no matter how good the relationship."

Ms. Stoneking said because her bank, United Southern, is in a rural area, it stresses customer service. "We want to be there for the customer, so that they are not just a number," she said.

Mr. Garry at Chase, or any of the other big-bank executives, could not have stated it any better.

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