After hearing correspondent banking customers complain that they must pay more than big banks for office supplies, UMB Financial Corp. of Kansas City, Mo., came up with a high-tech answer: a Web site that lets small banks band together to get bulk discounts.

The $7.5 billion-asset company devised this year to satisfy a need expressed by many of its 1,350 small-bank clients in seven states. By placing orders together, the banks get bulk rates from vendors such as Gateway Inc. and Boise Cascade Office Products Corp. -- rates usually reserved for larger companies.

"Without the scale of larger banks, it is hard for community banks to compete," said Alexander C. Kemper, UMB Financial's president and chief executive officer. "We figured that by working together our clients could get the buying power of big banks without giving up their autonomy."

He said that the idea for came after hearing from community bankers that they were selling in part because they could not keep noninterest expenses down.

UMB Financial sees big potential in It is currently rolling it out for its own customers and intends to offer it to commercial borrowers of its correspondent banks soon.

Those customers will be given a separate Web address to go to, so the individual bank's name will appear on the site instead of UMB.

Mr. Kemper said he believes that will help banks keep commercial customers that might otherwise go elsewhere for better rates.

He cited an unnamed UMB customer in Kansas City that the bank charges $40,000 per year in cash-management fees. The company also buys about 1,200 computers each year, and through the network can save about $100 on each machine.

"That business is going to save $120,000 a year just because it is banking with us," Mr. Kemper said. "They are not going to leave us just because another bank offers to do their cash management for $35,000."

UMB Financial is believed to be the first banking company to use the Internet to offer this buying service to clients. But it is not alone in using the Internet to gain an advantage with customers.

For example, Silicon Valley Bancshares of Santa Clara, Calif., created a Web site in April that provides small-business borrowers with links to find everything from employees to furniture to office space.

Dave Koto, executive vice president at the technology consulting firm Brintech Inc. in New Smyrna Beach, Fla., commended UMB and other banks for looking for new things to offer borrowers.

"The idea is to find a way to glue those commercial customers to their current bank," he said. "Banks nationwide are looking for ways to use the Web to differentiate themselves, and I think this is a tremendous strategy."

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