They are not your stereotypical bankers, playing golf with clients and doing business over cocktails at the country club. Frank Goldberg, the 53-year-old chairman and chief executive of CompuBank holds a master's degree in English literature from the University of Michigan and, with a specialty in Shakespeare, regards Hamlet as his favorite play. "There was a steep learning curve," Goldberg acknowledges of his transition from a liberal arts major into a bank's management training program nearly 25 years ago. But, he adds, "What I learned as an undergraduate was not a particular skill set, but how to think."Bazile R. Lanneau Jr., executive vice president at Natchez, MS-based Britton & Koontz First National Bank, majored in chemistry in college and, after several years of plodding along in the banking world, earned a law degree at "Old Miss," nearly exiting the industry altogether. A quarter of a century later, at the age of 48, he still seems slightly surprised that banking has been his career choice. "I probably should have become an engineer," he muses, "and I liked playing the trombone." Now he spends time at the piano.Michael Cleary, the 41-year-old president of WingspanBank.com, boasts impeccable Ivy League credentials--an engineering degree from Princeton and a master's degree from Dartmouth's Amos Tuck School of Business Administration--but he had no previous experience in the banking industry before becoming a cyber-banker. He had headed operations at companies that marketed baseball cards and rented out luggage carts at airports. "No one in my company looks like a banker," he says. "What we're doing is undefined. We're creating the new bank."Such are the backgrounds of just a few of today's top Internet bankers. So disparate is this new breed of banker that it is nearly impossible to categorize them. Even so, they share a number of attributes: most are Baby Boomers in their 40s or early 50s, and they embrace technology without turning into "technogeeks." They are comfortable around casually dressed, twenty-something programmers and hotshot computer jockeys conversing about "bits" and "bytes." But that is mainly because they have good interpersonal and management skills. They also share a keen interest in harnessing technology and a willingness to explore new vistas. At Wingspan Bank.com, the Delaware-based virtual bank that was named No. 1 by Kiplinger's Personal Finance magazine, the company's top executive thrives on finding solutions to thorny problems. "I have been a tinkerer my whole life," says Cleary. He grew up playing with Lincoln Logs and Erector sets, and as a teenager, once took apart a Kawasaki 125 motorcycle and put it back together again.
Lanneau recalls taking a class on banking law at the University of Mississippi from a professor who had himself been structuring deals for Japanese acquirers in California. He remembers vividly the instructor's reaction when he crunched the numbers for an independent project on a bank acquisition and produced financial pro formas, complete with voluminous calculations of costs based on rules governing leveraged transactions and taxes. "The professor's eyes opened wide," Lanneau says. "He asked me, 'How did you do that?' ''That willingness to explore and experiment is a necessary quality, observers of the banking industry note, since the brave new world of online banking poses challenges galore. "One of the problems with financial services is that you can't just take a product as it is offered at the bank branch and offer it over the Internet," says Charles Wendel, president of Financial Institutions Consulting in New York. "You have to understand that the medium is different and that the customers' attention spans are different."To do that," he adds, "you do not necessarily need to have a banking background. You have to have an understanding of who your priority customers are, why people use the Internet and what you can do to draw them in."So if today's Internet bankers are passionately entrepreneurial and experimental by nature, they nonetheless remain unswervingly committed to figuring out the best ways of delivering banking services, using technology to differentiate themselves from the competition and even earn a profit. Interviews with several top Internet bankers included in this admittedly unscientific survey indicate that they combine the seemingly contradictory qualities of being detail-oriented while maintaining a broad strategic vision. Many also seem to have the attitude that their job is a busman's holiday--that they are being paid for doing something enjoyable and that working in the world of cyberspace is more fun than work. Among those interviewed were senior executives at Internet-only banks, community banks and established super-regionals that have online banking components.
The qualities that today would aid someone's becoming a top Internet banker, asserts Chris Musto, director of financial services at Concord, MA-based consulting firm Gomez Advisors, may not be the same as the qualities that spelled success at a traditional commercial bank. No longer are fitting in, conforming, playing the organizational game and patiently climbing the corporate ladder considered particularly desirable traits. Instead, cyber-banking organizations may need a more flexible, freewheeling person--someone "who exhibits leadership skills in times of change and discontinuity," Musto says.Not only do cyber-bankers accept and even welcome change, they sometimes sound downright iconoclastic. At Cincinnati-based Fifth Third Bank, 48-year-old James Hudepohl is the chief information officer and head of the institution's online bank. He asserts: "I'm a huge fan of the whole Internet." But embodied in his belief that cyberspace holds enormous possibilities for successful commercial ventures is the not-so-implicit criticism that bankers who hang on to old-fashioned modes of behavior and buck technology are needlessly doing themselves in. "Internet banking is just the natural progression of customers to financial services," Hudepohl says. "Financial services companies that are going to be successful in keeping pace are those with people who have good technology backgrounds and have fun at their jobs. Those that have fallen behind are the old guard." Those sentiments are echoed by Kellie Scott, the 44-year-old senior vice president and director of EChannels at First Union Bank, who came to banking with an undergraduate degree in psychology from the University of Southern California and a masters degree in computer science from Clemson University. She is responsible for not just online banking but electronic bill payment support, smart cards and the bank's online channel and Internet service provider. Rather than rebuke those whom she calls "stodgy old bankers," she is winning them over.Traditional, buttoned-down bankers may still look somewhat askance at her division. Her people "aren't much older than my kids," she says. Housed in a separate building at First Union's Charlotte, NC, headquarters, they wear sandals and cut-off jeans, work on space-age furniture, listen to music and ride their bicycles into the building, where they have access to a weight room and foosball. But the naysayers are being persuaded by the logic of electronic commerce's numbers, Scott insists. For instance, First Union's electronic banking customers tend to keep higher balances in their accounts than the bank's branch customers do.One need not be at an exclusively virtual bank or at a large money-center or super-regional bank to take advantage of the Internet either, contends David Hayes, president of Security Bank in Dyersburg, TN. His bank offers bill payment services and links to an online discount brokerage, along with the ability to transfer funds among different accounts and obtain account information. Hayes, 52, came to the Dyersburg bank, a three-bank holding company with $131 million in assets, from Union Planters Bank, where he had been an expert on mainframe computers and data processing. "I probably have a different background than most of my peers" in the world of community banking, he admits. "Most of them traditionally looked at technology and operations as a necessary evil. We were the folks in the other building; they were the folks at the 'real bank,' where you made loans and collected on them and accepted deposits."Today, as chairman of the payments and technology committee of the Independent Community Bankers of America, Hayes is something of an evangelist for the Internet. He exhorts fellow community bankers to read, along with the Wall Street Journal, Yahoo! Internet Life magazine. "What's happening is not something that you can look through the window and see," he says. "People are not going to beat down your door and say, 'Provide Internet banking.' But when you offer it, they take it."Or consider the case of CompuBank's Goldberg, the one-time Shakespeare scholar. His Internet-only financial services company, which is headquartered in Houston, was recently named the No. 1 online bank by Smart Money magazine. Forbes magazine also hailed CompuBank, naming it to its "Best of the Web" list, declaring: "Getting around this site is a breeze--the best we've ever seen."It is as if CompuBank were a reflection of its founder, who has no shortage of spirit; indeed, the enthusiasm that Goldberg exudes for the present venture is palpable. "There's nothing that I've done in my 25 years in banking and the thrift business that's this interesting, fun and exciting," he says. "I can't wait to get to work in the morning. The opportunity is just enormous."Over his career, Goldberg has managed to see opportunities where others saw only trouble and difficulty. He was the founding chairman and CEO of Security National Bank, growing the Houston-based de novo operation from next-to-nothing in 1985 to $80 million in 1994, when the institution was sold to Compass Bancshares. Not a bad record, considering that scores of financial institutions in Texas--banks and thrifts alike--went through a monumental bloodbath during many of the same years that his financial institution was thriving. "We opened a bank when others were closing," Goldberg says. That level of commitment has not only helped him assemble a management team with experience in banking and technology--including the respected Jonathan Lack, vice president for marketing and a former MCI executive--but he has also been able to secure blue-chip financing for his venture. Impressed by the organization's professionalism--CompuBank was the first virtual national bank to be chartered by the Office of the Comptroller of the Currency in 1998--such investors and strategic partners as GE Financial Assurance, Goldman Sachs & Co. and Marsh & McLennan Capital have flocked to Goldberg's banner.A high energy level among both the top executive and management team as well as the rank and file seems like a prerequisite for Internet banking, particularly when activity is in real time and swift execution is key. But online banking executives say it is important to rein in the boundless excitement that is naturally displayed for the latest technological gizmo. "You have to remember that we don't have a clue what a customer wants," says First Union's Scott. "You have to ask the customer, and not people caught up in whiz-bang technology and graphics."
Bruce Luecke, 44, senior vice president at Bank One's electronic delivery group in Columbus, agrees. He describes himself as someone "who is not a technologist by training--but I can talk technology." He says that a major part of his job is to rein in his staff and experts. "My biggest management challenge is saying 'no,'" he says. "I have to say 'no' more times than I say 'yes.' We have to keep disciplined in attacking each new project or providing a new product, and I have to say no to ideas, concepts and vendors who constantly want to put bells and whistles on products that would be incrementally meaningless."Another constant challenge for senior executives is to forge a coherent, functioning team out of a group of employees who are likely to have sharply divergent skills, talents and personalities. First Union's Scott describes just a few of the types. There are the creative people who design Web pages; there are technical people, like mainframe programmers and engineers, who build the Internet systems and connect it to the legacy systems; and there are other creative types in the marketing department who handle partnerships. "You put some of those in the mix and you have a very diverse work group," she says. "The analogy I use is that this is like a band--if you have an exquisite drum player who is too loud, everybody fails. It has to be synchronized in a team effort if it's going to come out right."Wingspan's Cleary uses strikingly similar language to describe his task as a manager. Employees have come together at Wingspan from a variety of worlds including an amalgam of companies--First USA (the Bank One credit card subsidiary that owns Wingspan), GE Aerospace, GE Investments, Vlassic Pickles and H&R Block. He likens the company to a baseball team, which requires as an assortment of skills. "A guy playing right field can't play third base, and a pitcher can't hit like a designated hitter," he says. "Anybody who hires a staff in his own image makes a mistake. When we put together Wingspan we hired with a focus on diversity."But what is key to achieving success in online banking is to make sure that the service earns money for the bank. For Hayes, the small-town banker in Dyersburg, TN, online banking is a way for the bank to hang on to the town's sons and daughters as they go off to college or even move away.
CompuBank's principal growth strategy is co-branding--becoming the exclusive bank for the GE Financial Network, for example--and sharing customers as it induces them to sign up for checking and savings accounts, Visa check cards, direct deposit and money transfers, free bill payment and other services. "We have had to be very flexible to do this," says Goldberg. "None of the paradigms at any of my other jobs prepared me for this."At First Union and Britton & Koontz, the online services of the bank also serve as an Internet services provider. The story in Natchez is especially interesting: Instead of signing up with America Online, say, locals can pay $14.95 and obtain access to the Internet through the Britton & Koontz. Bank customers, moreover, get Internet service for free if usage is no more than 10 hours a month and at reduced rates if usage is higher. "It's our free toaster," quips Page Ogden, the president of the venerable bank, who credits Lanneau for hatching the idea. "Bazile is someone who has extraordinary gifts with technology," marvels Ogden.By giving Lanneau free rein, Britton & Koontz has been able to outflank the competition, offering such services as check imaging, which gives consumers electronic access to a picture of a canceled check. Moreover, the bank put up venture capital money to create a high-tech Internet company. Headed by Lanneau, Sumx, as the company is known, has branched into providing online banking to other community banks, including Millennium Bank in Reston, VA, and Bank Audi, a New York-based financial institution.If this breed of banker finds Internet jobs more fun than the more traditional brand of banking, that doesn't mean that e-bankers have scorned all of the bankers' traditional pursuits. Luecke of Bank One is an avid golfer, he says, but he plays it on his own time--there is no way that a banker can really justify playing golf with an online customer. And Mississippian Lanneau describes himself as an enthusiastic golfer, if not a terribly proficient one. "My chairman said he would worry about the bank if I ever had a low handicap," he says. "But that hasn't become a problem."
