, an Internet bank expected to open late this fall, says it plans to differentiate itself by emphasizing customer service.

Officials at Nexity Financial Corp. of Birmingham, Ala., said they would run core data processing and call center operations in-house to ensure customer satisfaction.

Like other entrants in the increasingly crowded Internet banking field, Nexity is aiming to distinguish its services.

Bank One's has taken a "best-of-breed" approach by offering products and services of competing financial institutions in addition to its own. Others, such as Sovereign Bancorp's planned 1st, are working to develop shrewd marketing ploys to attract customers.

Gregory Lee, Nexity's chairman and chief executive officer, said customer service will determine whether his bank reaches its goal of becoming the largest and most profitable Internet bank.

Internet banks have been hindered by their inability to respond quickly to the large numbers of interested customers, Mr. Lee said.

Ian Rubin, a senior analyst at Needham, Mass.-based Tower Group, agreed that customer service will be important on-line. "Sensitivity to customer satisfaction will really be a differentiation as Internet banking proliferates," he said.

Other Internet-only banks outsource data processing and call center operations. Net.Bank of Atlanta, for example, uses Bisys Group Inc. for core account processing and Customer Access Resources Inc. of Raleigh, N.C., for its call center. A Net.Bank spokeswoman said the bank turned to outsiders so it could better focus on core businesses.

Mr. Lee, who previously worked in Atlanta at Banker's Bank, a correspondent servicing institution for community banks, is building a team to address customer satisfaction. It includes Steven Jones, chief credit officer, who joined from Compass Bank, and Steven Powell, the chief operating officer, who for 11 years held the same title at Carolina First, the largest shareholder of Net.Bank.

Mr. Powell is building a call center with multiple T1 lines to ensure rapid response and to eliminate traffic jams. is to run Information Technology's Premier2 software in- house. The software, which also is available through Brookfield, Wis.-based Fiserv Inc.'s service bureau, handles bill payment, back-office processing, automated teller machine and account processing, and customer account activation. Nexity chose the Information Technology software over other options for its ability to run on the Internet without a personal computer.

Information Technology also is providing Nexity with Unisys' ClearPath data base, which gives real-time customer account information through all types of delivery channels. Having one data base will let Nexity produce a universal statement for all types of accounts, Mr. Powell said.

Mr. Lee said he also hopes to maximize customer satisfaction through proprietary methods of originating mortgage, home equity, and credit card loans. One element of his loan-generation plan is to seek alliances with organizations that have physical offices.

Besides offering basic banking services at competitive rates, plans to eventually offer bill payment and discount brokerage and insurance services through third parties. Mr. Powell said Nexity plans to begin these services next spring.

A nationwide advertising campaign is planned.

The five bankers who started Nexity chose the Internet as their delivery venue for its growth potential. "The Internet model is growing as much in a day as a traditional bank grows in a year," Mr. Lee said.

To shorten the on-line bank's time to market, Nexity has signed an agreement to buy People's Bank, a $30 million-asset community institution in Grant, Ala.

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