MIAMI - FleetBoston Financial Corp.'s Internet business unit, eCatalyst, has been a crucial component of the company's effort to stave off competition from nonbanks, said Kenneth J. Deveaux, director of business-to-business e-commerce.

In September, FleetBoston organized its Internet initiatives under eCatalyst so it could assess itself, develop new products, and - as the unit's name indicates - jump-start a comprehensive Web plan.

"Our strategy is to use the Internet and e-commerce to drive our business and decide where our strength is, and have the fortitude to get out of areas where we do not have the strength," Mr. Deveaux said in a presentation Tuesday at the Bank Administration Institute's B-to-B eCommerce conference here.

The first step for eCatalyst was to take inventory of its businesses, Mr. Deveaux said. In doing so it uncovered complex technology, convoluted structures, and redundancies, he said.

"We found we had 439" Web page addresses "registered to Fleet, 190 marketing partners, and 190 different technology deals," Mr. Deveaux said. "We also had complicated pricing, which made it difficult to determine how we counted the beans each month."

The unit then identified projects necessary to get the whole corporation moving toward a broad Internet strategy, such as upgrading infrastructure, building a portal engine, instituting paperless procurement, and introducing wireless services, he said. To do these things, "we needed the leadership from the top of the organization."

Fleet has begun streamlining its 21 technology systems to one system that will cost 50% less to operate, he said. The company also organized its businesses under separate Web portals for corporate, retail, and small-business customers.

With more than 500,000 corporate, middle-market, and small-business trade and cash management customers, the fifth-most among U.S. banking companies, Fleet recognized that business-to-business electronic commerce could be one of its strengths, Mr. Deveaux said. Last year its global services division generated $1 billion of revenue and contributed $250 million to its net income, he said.

"We had reason to press B-to-B as a defense of this franchise," he said.

Fleet now has systems to let it originate transactions, conduct financing, manage risk, manage funds, and offer billing, account information, and receivables over the Internet.

It has spread its bets across different technologies by striking alliances with Ariba, TradeCard, Spectrum, and other companies, Mr. Deveaux said. "Business-to-business is an ecosystem, and we don't know what will survive, or which will have a critical mass. We are focusing on getting our house in order and our systems Web-enabled to make it easier to extend out to different venues such as Ariba, FinancialSettlementMatrix, or directly to corporations."

But staying ahead and developing new applications is hard, he said. "There are no specifications out there for what needs to be developed."

Hard as it may be, Mr. Deveaux said, banks cannot afford to be merely payment providers - they have to become commerce enablers.

"If we hang on to payments, but all we have is the five-cent ACH transaction, we may have won the battle, but we lost the war."

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