Bank of America's electronic bill payment capabilities helped it snag top honors in a recent ranking of Internet banking services.

Unlike the majority of banks that offer electronic bill payment, Bank of America performs its own processing, rather than rely on a third party, such as Checkfree Corp.

Bank of America officials said its in-house capability helped it score highly in customer confidence, one of five dimensions rated by Gomez Advisors, Concord, Mass.

Michael DeVico, executive vice president of Bank of America's interactive banking division, said, "Our error rate in bill pay is very low, and we provide excellent customer service."

This high accuracy rate helped boost the bank's overall score to 6.54 out of 10, ranking it highest of the 97 banks surveyed. Bank of America was followed by Security First Network Bank, Wells Fargo Bank, Salem Five Cents Bank, and Bank of Hawaii.

Of the top five banks, Bank of Hawaii earned the highest score in terms of ease of use, while Salem Five Cents earned the best marks for being low- cost. The two remaining factors that Gomez analyzed-in which all the top five banks scored moderately-were the richness of on-site resources and relationship services.

Salem Five Cents earned a near-perfect score in the cost category, by not charging monthly or start-up fees. "The cost of entry is low to allow people to test the product," said William H. Mitchelson, chairman and chief executive officer. "It's a pay-as-you-go service, and we only charge for excessive activity."

By keeping its overhead costs for Internet banking low, the bank says, its no-fee strategy is working. Of the 5,000 users of Salem Five Cents' Virtual Branch, nearly 100% are new customers. "We're a $1 billion-asset institution with a $60 million virtual branch," said Mr. Mitchelson.

Three employees support the Internet banking solution, which is powered by software from Security First Technologies run on a service bureau basis through M&I Data Services. Travelers Express handles bill payment processing.

Many of the largest banks in the country were not eligible to be in the survey, which required participants to offer bill payment, account look- ups, and account transfers on the Web, without using personal financial management or proprietary dial-up software.

Banks that did not qualify included: Chase Manhattan Bank, BankBoston, Bank of New York, CoreStates, Crestar, First Chicago, First Union, Fleet, KeyCorp, NationsBank, Norwest, PNC, and SunTrust.

First Union, for example, "shows promise on the Internet, but bill payment is still only available to former customers of Signet," said the Gomez report. Numerous other big banks, including Fleet, Norwest, PNC, and First Chicago NBD, still rely on personal financial management software to give customers access to their accounts on-line.

The weak showing among large banks allowed mid-tier and smaller banks to jump into leadership positions. Many of these banks have turned to Internet software providers-such as Security First Technologies of Atlanta, Jack Henry & Associates of Monett, Mo., nFront Inc. of Bogart, Ga., and Edify Corp. of Santa Clara, Calif.-to support their Internet offerings. Three of the top-five ranked banks use Security First Technologies' S1 software.

"The Internet banking arena has a heavy vendor flavor," said Chris Musto, senior consultant at Gomez Advisors. "The majority of solutions involve substantial software assistance."

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