WILLIAM M. RANDLE Senior vice president Huntington Bancshares Columbus, Ohio BILL GATES' STATEMENT, "Banks are dinosaurs, they can be bypassed," has a degree of validity to it. Microsoft and other technology companies understand several things better than most commercial bankers - information, networks, and distribution. Mr. Gates' observation that banks are dinosaurs could become true if in fact the industry does not take note of the challenge. A failure on the part of banks to recognize this threat will result in the loss of control of the payment system, as well as the loss of control of the core customer relationship. The issues with regard to the payment system and control of the customer relationships banks now enjoy extends beyond the challenge offered by Mr. Gates. As an industry, we must maintain control of the payment system and guard against any network - including our own credit card association - that would reduce our core customer relationships to a globally branded commodity. Mr. Gates has actually done the banking industry a service by pointing out our weakness and providing a needed call to action.

*** JOSEPH S. PENDLETON 3D Senior vice president Meridian Bancorp Reading, Pa. GATES' REMARK ANNOYS MANY BANKERS because it is so painfully close to what we already know: Forcing short-term performance improvement by cost cutting and outsourcing is the plodding path to our demise. I know I can survive and evolve into a crocodile, but that makes me an ugly remnant in a world dominated by another order. The strange light in the East, becoming brighter every day, is really the combined reflection of all the PC monitors, TVs, and screen phones being bought by the American consumer and used for interactive services. We can choose to perceive it as a guiding light to the new paradigm of financial service delivery. If we don't, it just may prove to be the onrushing comet that spells our extinction.

*** LAWRENCE A. WILLIS Executive vice president First Manhattan Consulting Group New York I DON'T THINK that is a correct view from either a technology perspective or a business potential perspective. I think the banks will continue to maintain a dominant position in the payment systems. There is the potential for the banking system to lose control, but given what I have seen in terms of the technology initiatives on the part of the banking industry, I don't think that's a likely scenario.

*** CAROLYN SPICER Senior vice president The State Bank Fenton, Mich. THE TRUTH HURTS, but it is not necessarily fatal. In fact, I think this single comment has done more to rally bankers than was accomplished by the combined pleas of industry leaders in recent months. It has definitely given us a wake-up call. As an industry, we cannot afford to reach over and hit the snooze button. Technology is a great equalizer, enabling interdisciplinary development of delivery channels and services that were formerly industry specific. However, I do think there are some delusions of grandeur among major players who fail to incorporate human factors into rollout strategies. Widespread consumer adoption will pivot on the creation of consumer confidence with respect to security and personal privacy issues. This is where banks have a new role to play. Consumers trust banks to protect confidentiality when transferring value through a variety of payment options. Bill payment services essentially expand our role to that of financial agent and establish the basis for development of yet a third dimension. Opportunities will exist for banks to promote personal agentry services, thereby providing consumers with confidential access to electronic commerce as well as information brokerage services.

*** BRUCE BURCHFIELD Chief executive National Payment Clearinghouse Inc.* Downers Grove, Ill. WHAT BILL GATES is accustomed to is fundamentally changing businesses. And if you look at the history of Microsoft, the rate of change that has happened in businesses that the company has been involved in is phenomenal. Our understanding of what he meant by that quote is very simply this: If you look at what has happened in banking, the industry has done an excellent job of automating the back end, meaning wealth is not stored literally in bullion or currency and coin, although those clearly exist for trade. But the wealth of America exists in mainframes. What banks will need to do in the coming years is to embrace the technology that is allowing consumers to interface that wealth in an automated fashion. And there are clearly examples of things that banks have done: ATMs, direct deposit of payroll, and, to a certain extent, credit cards. What you are going to see in the future is an accleration of that change, and banks are going to have to respond to it. Bill Gates' comment would probably mean more that banks have not put the appropriate amount of emphasis on making that change. * National Payment Clearinghouse is a subsidiary of Intuit Inc., which Microsoft Corp. has agreed to buy.

*** STEPHEN P. WHITE Managing director Dove Associates Inc. Boston YES, BUT PROBABLY NOT FOR LONG. Most banks we work with, particularly the large banks, recognize that a "total embracing" of technology and exploiting it in new ways to do business is essential for their future, and probably for their survival. When faced with these realities, banking paradigms should shift quite rapidly. A better question might be whether banks are disadvantaged dinosaurs. I believe not. Technology is something that can be caught up on quite rapidly. The more critical issue for banks is to create an infrastructure - largely brought on by technology - that quickly assimilates change and allows them to respond to opportunities with great agility. This change, in my opinion, is more difficult than procuring state-of-the-art technology, takes more time, and is more critical to banks' long-term success.

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