Can a small bank serving a town of 346 people compete with major banks on-line? Ross Knott, president and CEO of the State Bank of Hildreth, NE, an institution with $23 million in assets, is counting on it. "We're offering the same products

and services as anyone, regardless of size," says Knott.

Hildreth is using nFront, an Athens, GA-based provider of Internet banking technology for community banks, to offer a full range of on-line services. Customers can open accounts, apply for loans, view balances, transfer funds, pay bills, download statements, interact with bank personnel via e-mail 24 hours a day. "We don't have to be in a metropolitan area to service customers," says Knott. Small banks have an edge, he says, because they can provide personalized service.

Lincoln, NE-based First Commerce Technologies (FCT), Hildreth's core data processor, selected nFront as the bank's on-line solution. Mike Tadlock, FCT's svp of sales and marketing, says competition will get dicier as more small banks go on-line. "Those who get in early are the ones that are going to gain and retain a reasonable customer base."

Since cost is minimal, no bank is too small to develop a Web site. The cost of going on-line for Hildreth was about the same as the annual salary of a bank employee. Planters Bank & Trust Company, with $14 million in assets in Thomaston, AL, spent less than $1,000 to go on-line.

Community bank on-line services can be unique and more personalized to the market. State Bank & Trust of Brookhaven, MS, has a "school bytes" section on its Web site that helps children with homework, offers on-line tutoring and has graphics that make algebra and trigonometry fun. The Business Bank of California in San Bernardino posts area employment opportunities.

-peterson tfn.com

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