Principal Financial Group, one of 14 insurance firms with a thrift charter, announced it has amassed 1,000 deposit accounts in a virtual bank it launched in April.

The only one of the thrift-approved insurance firms to offer banking on- line, Principal Bank joins two other virtual banks-Security First Network Bank and Atlanta Internet Bank-that have been given permission by the Office of Thrift Supervision to run under a thrift umbrella.

The bank appears to be keeping pace with other Internet-based banks in terms of the number of accounts opened in the first three months of operation. But its accomplishment is tempered by the fact that 90% of its 1,000 virtual accounts were opened by employees of the Principal Financial Group holding company.

After three months, Atlanta Internet Bank had opened 1,200 deposit accounts. Now, after two years of operation, it has about 10,000 deposit accounts.

"Our strategy is different from Atlanta Internet Bank and Security First Network Bank," said Steven J. Ollenburg, 37, president of Principal Bank. "Ours is an accommodation strategy-to add more products and services to our existing base. We're trying to design products and services, prices, and functionality to match the portfolio needs of an existing Principal customer."

Its 9.7 million customers come to the Des Moines-based holding company for life insurance, mutual funds, 401(k) plans, and health care policies. The 120-year-old firm has more than $67 billion of assets under management.

By tying its current array of services to on-line banking, Principal Financial demonstrates the ability of nonbank companies to ease into banking. For example, some customers of its 38,000 employer-sponsored 401(k) plans now have personal identification numbers so they can access those balances on-line.

The ultimate goal appears to be to offer a comprehensive view of financial relationships. "For an individual to see his normal retail portfolio and 401(k) balances updated daily, we feel that is very powerful," said Mr. Ollenburg.

Mr. Ollenburg, who moved to Principal in 1996 after spending four years as president of Liberty Financial Corp., aims to have $70 million to $100 million of deposits after three years. "We're not concerned about growing the bank right now, but we're concentrated on getting it right," he said.

While there are no plans to open branches, that strategy "may change if the Internet is as successful as everyone perceives," said Mr. Ollenburg.

Besides the Internet, customers can gain access to the bank's offerings- checking accounts with interest and certificates of deposit-through the telephone, automated teller machines, a Visa debit card and mail. There are no transaction fees or ATM charges. To open an account, $250 is required.

Internet-enabled features include transfer of funds between accounts. In the third quarter, electronic bill pay will be provided by Travelers Express along with on-line viewing of cleared checks and credit cards.

"It is Principal Financial's goal to Internet-enable all financial transactions for our customers," said Mr. Ollenburg.

The bank, which has eight employees, licensed Internet banking software from Security First Technologies, Atlanta, in August, and in January, signed a five-year contract to outsource its core processing to Alltel Information Services Inc. of Little Rock.

"We will use data base technology to segment our customer base and help the company leverage marketing opportunities for cross-selling," said Mr. Ollenburg.

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