As the widespread effects of downsizing continue to ripple through the industry, some top bank technology executives are deciding that it's better to be a big fish in a small pond.

Dislocated by massive layoffs and disgruntled by the changing structure in their workplaces, these bankers are taking their dual expertise in technology and financial services to smaller, more focused companies that crave their knowledge and contacts.

Although they are often forgoing the clout and perks that go with a big-name employer, the executives say that what they gain in control and diversity far outweighs these losses.

More Pressure and Rewards

"It's much more intense, and there's a lot more pressure," said Marvin Hughes, president of Financial Image Solutions Inc., a technology vendor based in New York City. "You have to be more resourceful and inventive, but there's more commitment because the collective reward is greater."

Mr. Hughes, who formerly managed the wholesale lockbox image project for Manufacturers Hanover Trust Co., took an early retirement package when the bank merged with Chemical in December 1992.

After 14 years at Hanover, he said, his decision to move on was propelled by the merged banks' lack of commitment to the client-server and open systems technology that he and his associates had been developing.

Different Views of Future

"From my perspective, the greatest change was that they appeared to be less committed to the technology we were committed to, and that we saw as the future," Mr. Hughes said.

Although he was invited to remain at Chemical, Mr. Hughes, whose background is in data processing and systems, joined three others -- two of whom are former colleagues -- to form a company offering a client-server system to banks.

After failing to obtain the rights to the lockbox system he had helped develop at Hanover, Mr. Hughes and his partners spent more than a year creating a similar image-based wholesale product of their own -- with a rewritten code and a different platform -- which is now being tested at a bank.

While he sacrificed the resources and name recognition that may have speeded up the system's development, Mr. Hughes said that the lack of bureaucracy had ensured much swifter decision-making. "There's just a greater sense of getting on with things," he said.

Similarly, Kenneth J. Soldwedel, president of Integrated Cash Management Electronic Banking Services, felt it was time to get on with things after his bank underwent a major management change. He took more time to make his decision, however.

After 17 years at Irving Trust Co., which was acquired by Bank of New York Co. in November 1988, Mr. Soldwedel waited until January to join ICM.

Bored with the Work

Bank of New York's decision to use Irving's product technology ensured Mr. Soldwedel of a job, though the combined institution cut about one-third of its work force over four years.

But after integrating the merged banks' systems and operations and overseeing correspondent banking in Europe, Mr. Soldwedel decided he had fallen into a rut and needed a change.

But, he said, "I'd gotten to the stage, five years after the merger, where I had to ask, 'Where do I go from here?' Was I willing to sit in a job and coast or find something more interesting?"

At first, Mr. Soldwedel admitted, he traveled the traditional channels -- interviewing for executive vice president slots at big banks, where he thought he would be most comfortable. (Mr. Soldwedel had spent two years at Citicorp before joining Irving.)

Takes Good Advice

But based on the advice of an executive headhunter, Mr. Soldwedel quickly turned to hardware producers and other technology companies.

By changing his focus, he moved from being just another senior-level executive with technology experience, to a much-in-demand financial industry expert who could understand systems and services and translate that into a valuable, growing vertical market.

He found the right mix for himself and his talents at ICM, a 12-year-old company that wanted to increase market share by selling retail delivery systems to banks.

The company already has a small, select customer base -- including J.P. Morgan & Co., Chase Manhattan Corp., American Express Co., and World Bank of Canada.

Mr. Soldwedel hopes to capitalize on his expertise and contacts to grow this market for ICM.

"This company understood building products, but they didn't understand what they were for, what the client issues are," he said.

Much like Mr. Hughes, he works harder than in the past. Mr. Soldwedel describes a long day at Irving/BONY as 10 hours, whereas he averages at least 12 hours a day at ICM. Such dedication could stem from the fact that he also owns a piece of the company.

All in all, Mr. Soldwedel said, this "two-edged sword" has given him greater "control of my destiny." "Now, there's no one to clear the way," he said. "It's a lot more hands-on, and you don't have multiple levels of approval."

Bank reengineering has driven many top executives into new fields in the past four years, according to Tony Lord, a recruiter for A.T. Kearney who places financial industry executives.

Although he does not see this as a "conscious trend" on the part of bank technology managers, Mr. Lord said that this kind of move seemed logical for those older, well-connected executives who have a solid understanding of technology.

"Those of us who entered the industry in the '60s and '70s are considered dinosaurs now," Mr. Lord said. "One starts to hit that glass ceiling by now ... I did in the cash management business."

For James Hassen, formerly an executive at Citicorp and now a director of Locus Computing Corp., working for a money-center bank didn't pose the same problems as many other big banks did.

Citi's decentralized nature and aggressive corporate culture didn't present the same amount of cushioning or the same lack of variety as at similar institutions, he said.

"I think the reality of Citi is that it's about 200 different autonomous units," Mr. Hassen said, "and I liked moving from were a lot of political turfdoms were a lot of political turfdoms . . . The 'mother-may-I's' would not succeed."

Over his 13 years with Citi-bank, Mr. Hassen had headed development at the bank research and development subsidiary, Transaction Technology Inc.; served as chief technology officer for the travel and entertainment division; applied technology to various other units; and, most recently, oversaw distribution technology, including branches, automated teller machines, and home banking.

When his unit was dissolved and he was laid off in August 1991, Mr. Hassen and four partners -- much like Mr. Hughes with FIS -- started his own technology company. However, Mr. Hassen did not fare quite as well.

The Avalon Group, which Mr. Hassen and his associates founded immediately after leaving Citibank, never gained enough name recognition in its two years of existence to "reach critical mass," he said. The partners could not keep up with simultaneously marketing and delivering product to customers, and the company was dissolved in September 1993.

After approaching Locus for a freelance consulting assignment before Avalon's failure, Mr. Hassen negotiated a full-time position there. So far, he has found the right mix for his skills at Locus, which strikes a balance between small company feel and corporate recognition.

"I liked the entrepreneurial side of the company, where you can put your arms around it," he said.

Drawing from a large base of past banking contacts, Mr. Hassen, like Mr. Hughes and Mr. Soldwedel, has been able to build a stronger base in the financial industry. Mr. Hassen was able to pull the Inglewood, Calif.-based technology developer deeper into the lucrative financial services market, helping them to sign a recent service contract with Bankers Trust Co.

Right now, Mr. Hassen and Locus are trying to address the migration of many banks from proprietary systems to open systems that can use software from multiple vendors as one of the cornerstones of its business.

And for Mr. Hassen and his colleagues, harder work, higher yield, and greater responsibility seem to be meeting their changing needs.

"I can remember being at Citi, and the plushness of a large office was more of a need," Mr. Hassen said. "Now it's a lot further down the list."

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