Net.Bank Inc., which rapidly covered all 50 states with its Internet banking services, sees barriers to going global.

Loan products present the biggest challenge to worldwide expansion, Jeffrey Watson, chief lending officer of Atlanta-based Net.Bank, said last week.

Credit bureaus around the world are not as developed as those in the United States, he said. Signing loan documentation also poses logistical problems.

"We have far more sophisticated credit reporting agencies than anywhere else in the world," Mr. Watson said at GartnerGroup's Internet and electronic commerce conference in New York.

Until the international financial community tackles legal and regulatory issues regarding credit information, he said, transactional products will be easier to export over the Internet than loan products.

Net.Bank uses software from CFI Proservices Inc. of Portland, Ore., to deal with states' varying loan documentation requirements in the United States, Mr. Watson said.

To lend internationally, an Internet bank would need to work with entities in more than 50 countries to handle legal documentation on the bank's behalf.

"There is scope for a company to do what CFI has done in 50 states in foreign countries," Mr. Watson said.

Net.Bank announced last week that it had hired PNC Bank Corp. to supply processing, underwriting, funding, and servicing components for its Internet consumer lending offering. It would "need a similar type of partner to develop competencies globally," Mr. Watson said.

Three-year-old Net.Bank, which has no current plan to go global, has 27,000 account holders in the United States and 25 other countries. A U.S. address and Social Security number are required to open an account.

"We haven't even begun to try to tackle offering banking services to non-U.S. nationals," Mr. Watson said.

Net.Bank is revamping its account-opening process so it will be completely digitized, apart from sending a piece of paper to a consumer for a signature.

"Until digital signings occur, physical signings will still have to occur at a local level," he said.

Laura Starita, an analyst at GartnerGroup, said cultural and language barriers present "significant obstacles" to geographic expansion. She pointed out that most Americans bank at an institution based in the area where they live.

William Barr, an executive director at Telcordia Technologies, formerly Bellcore, said offshore accounts are a challenge politically. It is "extremely unlikely that regulators will stand idle if money leaves the country," he said.

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