First Union Rolling Out Cash Management Service Geared for Small

First Union Corp. has introduced a new cash management service for small businesses.

The service, known as All in One, offers small business customers a choice of viewing their account information on-line or receiving faxes.

Though the technology involved is basic, the fact that a bank with First Union's clout is targeting this market segment is a prime example of the industry's increasing interest in small businesses.

"Traditionally small businesses have been approached by community banks," said Frank Carter, market segment manager for small and midsize businesses in First Union's cash management division.

"The large corporate banks have not done a good job in focusing on the small-business market."

The reason for large banks' rising interest in small businesses is simple: the large corporate-customer market is starting to stagnate. By contrast, the small business market is expected to grow "at close to 20%" over the next year, said Lawrence Foreman, a cash management analyst with Ernst & Young.

To reach the small business market, which First Union defines as companies under $20 million in annual sales, the bank changed its way of thinking.

"We have found out that the small business customer is kind of a unique animal in that they have very basic needs but they sometimes have very sophisticated PCs in their offices," said Greg Ledford, manager of First Union's market segment management group.

According to its own market research, First Union discovered that "all they're really looking for in most cases for on-line banking is to be able to find out what their balances are," Mr. Ledford said.

This need, First Union believes, can be addressed by their business fax service.

"In a lot of cases, they don't want to take the time to hook up a PC and get into a program to find that out," Mr. Ledford said. However, First Union expects some of the business fax customers to gravitate toward PC banking in time.

For its PC product, called PC InVision, First Union believes that its "ability to do on-line real-time stop payment and wire transfers" will distinguish it from some of the other products on the market, Mr. Ledford said.

Small businesses can download account information from the bank."Some systems you're on-line the entire time and the clock is ticking as are the charges," Mr. Ledford said. But not First Union's.

Both the fax and PC services feature a master checking account and two zero-balance accounts.

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