Huntington Bancshares, an early financial backer of the Internet banking software vendor S1 Corp., has dropped that company as its Internet banking provider in favor of a rival vendor, Corillian Corp.

Chester L. Thompson, senior vice president and general manager of electronic commerce at Huntington, said the main reason was so the bank could run the system in-house. Corillian permits that; S1 requires banks to outsource the process completely.

Huntington, of Columbus, Ohio, had been backing away from S1 in favor of Corillian over the past few months. In April, Huntington purchased $7 million of Corillian's shares during its initial public offering. Later that month, the bank announced it was working with Corillian, of Beaverton, Ore., to create a company called e-Bank, which will sell technology to small and mid-tier financial institutions that want to take advantage of economies of scale.

By using Corillian's software for its internal systems, Huntington says it will be better able to integrate e-Bank with its own retail Web bank, and this will ultimately let it offer real-time transactional information to online banking customers, Mr. Thompson said. Huntington said it expects to introduce the real-time capabilities by yearend.

Huntington is one of several banks that have invested in Atlanta-based S1 but given key contracts to its competitors. Most recently Royal Bank of Canada, another early investor in S1, hired Magnet Communications of Atlanta to set up its Internet banking services for business customers. In February, Wachovia Corp. announced it would use Corillian's software in addition to S1's. In March, Citigroup Inc., another investor in S1, said it would do the same.

Andrew B. Collins, an analyst with ING Barings Ltd., said Huntington's decision to go with Corillian is emblematic of the conflicts banks face in deciding whether to outsource their technology or run it internally.

"It is a political battlefield within the banks," he said. "They have to figure out if they are going to outsource one of the fastest-growing components of their business." The other question, he said, is whether "the organization has the knowledge internally, and I would say nine times out of 10 they don't."

Stephen C. Franco, an analyst at U.S. Bancorp Piper Jaffray of Minneapolis, said Huntington's decision is "a big win for Corillian, because they do not have many major banks." According to Corillian, Huntington will be one of its five largest bank customers, among 33 customers under contract.

Charles Ogilvie, general manager of the Americas for S1, said he is unfazed by the loss of the contract. He said S1 had turned down Huntington for the e-Bank project, which the vendor decided would have caused it to stray too far from its core business.

"When you are the largest provider of Internet banking and infrastructure on the planet, then you cannot win them all," Mr. Ogilvie said. "If you could win them all, then you would be on the news being called a monopoly like Microsoft."

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