Bank technology vendors tend to go where their customers lead them.

Fiserv Inc. anticipated the repeal of the Glass-Steagall Act and for five years factored that likely event into its business strategy. The Brookfield, Wis., data processing company acquired several securities and insurance processing firms so it would be prepared to meet the changing needs of its financial services customers.

The convergence, however, has not proceeded as quickly as Fiserv had expected, said Leslie M. Muma, Fiserv's president and chief executive officer.

"I have heard noise that maybe some banks - maybe a lot of banks - are not going to want to do securities and insurance and maybe the public does not want that either," he said.

"We believe you will see some full-service, Citigroup-type financial institutions. Then you will find others who want to be niche players," he added. "Maybe you will just be a bank, or maybe a bank/mortgage bank, or just an insurance/securities firm."

International Business Machines Corp., meanwhile, has combined its worldwide insurance, banking, and securities businesses. Jerry Cole, an IBM executive, was named general manager of the consolidated global financial services group.

IBM played down the significance of the reorganization, though it said the move reflects closer linkages among formerly disparate businesses.

Jeffrey Lynn, vice president of IBM's consulting unit for the finance industry, said the revamping "was purely an internal administrative convenience for us. It is not going to be customer-visible at all."

He said he expects banks and insurance companies to merge and "get into one another's business," at a quicker pace. "We think it will be fascinating as all the strategies sort out against the different sets of consumer preferences," he said. "Whatever the outcome, it will be something to watch."

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