Home Banking: Going On-line for a Song

Small banks that want to give customers the kind of Internet service that big banks provide could have a friend in Block Financial Corp. The H&R Block subsidiary, based in Kansas City, MO, is offering community banks Internet banking ser-vices, providing the expertise and technology these smaller banks can't acquire on their own. Through its Conductor Web site, Block offers banks transactional Internet capabilities that just a few leading-edge players have employed-all for $50,000 or less.

Block Financial has an alliance with bank processor Jack Henry & Associates of Monett, MO, a provider of back-office software and service bureau services to small and medium-sized banks. "Block is the link between the service bureau and the Internet," says Bill Anderson, president of Block Financial. "We can take a feed from its back-office software and build statements so that the customer can get real-time statements for a variety of accounts, download documents and pay bills."

RCB Bank, of Tulsa, was the first bank to go on-line with Block in March, though Block has relationships with 16 other banks that have projects in various stages of development. The company also has been negotiating with financial news agencies and mutual fund and insurance companies to provide additional on-line services to bank clients.

While large bank players like BankAmerica Corp., Wells Fargo & Co., and First Union Corp. offer Internet services and Security First Network Bank hopes to sell consulting services to large and mid-size banks, Block has little competition in the community bank arena.

And on-line services for smaller banks is not the only "lonely" market that Block is pursuing: Anderson says Block recently entered the subprime mortgage business "to provide service in a market that banks are largely abandoning."

-peterson tfn.com

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