WASHINGTON - Though large banks have a leg up in offering online services to their corporate customers, community banks are starting to catch up: On Tuesday, seven joined a consortium called eScout.com LLC, which pools the resources of small financial institutions so they can offer big-bank-style procurement services to business customers.

A spinoff of UMB Bank of Kansas City, Mo., eScout says it already counts 12% of the nation's banks as members - or 1,200 institutions - but these banks have a combined asset base of only $150 billion. The seven new members have an aggregate of $170 billion of assets, and eScout says this influence will help it reach a much broader swath of small businesses seeking online procurement and payment services.

Companies whose banks belong to the consortium - and who sign up for the program - can buy and sell from one another online through the Global Trading Web site operated by Commerce One Inc., a company that operates a variety of Internet services for businesses.

Sandy Kemper, founder and chief executive officer of eScout - which is based in Lee's Summit, Mo. - said the new members give the network the strength of one of the top five banks.

"Community banks lack for nothing in their ability to serve their customers, but they do lack scale, brand, and capital," he said at a press conference during the American Bankers Association's annual conference.

The seven new members come from around the country. The $30 billion-asset Citizens Financial Group in Providence, R.I., and $18 billion-asset Allfirst Financial Inc. in Baltimore are from the East. In the South there are $42.9 billion-asset Regions Financial Corp. of Birmingham, Ala.; $19 billion-asset First Tennessee Bank of Memphis; and $2 billion-asset First State Bank of Texas. The $23 billion-asset California Federal Bank unit of Golden State Bancorp. in San Francisco is from the West Coast, and $3 billion-asset Marquette Bancshares Inc. of Minneapolis, the North.

The consortium said it serves 6,000 small businesses through its bank clients, making it an early mover in a market that has recently attracted the attention and investment of the top banking companies. It expects 25,000 small businesses to be on its network by yearend and 100,000 by the end of 2001, Mr. Kemper said.

The consortium is to compete for those customers against much larger banks with equally big ambitions. Bank of America Corp., Wells Fargo & Co., Citigroup Inc., and Chase Manhattan Corp. have announced their intentions to build business-to-business marketplaces.

The marketplace devised by eScout, which runs on Commerce One's network infrastructure, facilitates electronic payments through the automated clearing house network.

Small businesses can use the site to manage their payroll and human resources functions and will one day be able to do their accounting there. All these services are to be offered under the brand of the community bank with which the small business maintains its accounts; the banks earn revenue through a profit-sharing arrangement with eScout.

"We can't build this on our own, but we can keep our brand and our trusted relationships," said Hal Tovin, president and chief executive officer of Citizens Financial Group's e-business division.

"Our customers will be able to sell on the East Coast to customers they haven't been able to see before," said Lelah Jenkins, senior vice president of Internet technology for California Federal Bank.

Avivah Litan, a senior research director at GartnerGroup Inc., the e-commerce consulting group based in Stamford, Conn., said she had not heard of a company addressing online marketplaces from a community banking angle. "It is a way for community banks to level the ground in order to play in the business-to-business field without having the resources."

So far, most business-to-business marketplaces have not generated a lot of traffic, Ms. Litan said. Companies use the marketplaces as a discovery tool to see prices and suppliers, then go offline to purchase because of the difficulties of integrating the marketplace services into their back-office systems, Ms. Litan said.

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