Two more companies are joining the ranks of publicly traded Internet banking software providers.

nFront Inc. of Norcross, Ga., made its debut June 29, selling 3.9 million common shares at $10 each. And Digital Insight Corp. of Calabasas, Calif., recently filed its plan to go public with the Securities and Exchange Commission.

Both are aiming at the still largely untapped market of small to midsize banks and credit unions. Only about 600-or 10%-of the 9,000 institutions in that sector have signed contracts with Internet banking service companies.

"There is a huge market out there," said Tripp Rackley, chairman and chief executive officer of nFront.

Its stock price rose $3.50 a share on its opening day. And it closed at $18 Friday, down from its close of $18.375 the week before.

Proceeds are being used to expand the company's software development staff and launch a marketing program to help its bank customers promote Internet banking and bill payment services to retail and commercial consumers.

nFront had $2.8 million of revenues for the quarter that ended in March, up 340% from $830,000 of revenues in the same period the year earlier. The company has contracts with 145 banks, 96 of which have gone live. It plans to continue targeting banks with up to $14 billion of assets.

The firm recently won an endorsement from the American Bankers Association as its preferred provider of Internet banking services for member banks, beating out four rivals.

Three-year-old Digital Insight plans to use the proceeds of its offering for general corporate purposes and the acquisition of complementary businesses or products, said Kevin McDonnell, chief financial officer. He did not comment on when the offering would occur or its price.

With 380 financial institutions using at least one of its products, Digital Insight had first-quarter revenue of $3 million, up from $1.6 million a year earlier.

"Digital Insight and nFront are doing a good job at differentiating themselves and gaining market share," said Chris Musto, senior analyst at Concord, Mass.-based Gomez Advisors. The new capital will help them continue to do so "in an environment where firms need to break out of the pack in order to thrive."

Mr. Musto pointed to recent consolidation in the Internet banking software market, including mergers of Security First Technologies with Edify Corp. and Home Account Network with First Data Corp.'s home banking unit.

"If firms want to survive, they will have to be aggressive and spend money to develop advanced applications, strong customer service, and show they are a leader by going public," he said.

Community banks will benefit by receiving greater support for competitive products such as bill presentment, on-line brokerage, and real- time loan applications, Mr. Musto said.

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