Kalispell, Mont., converged upon the windy beaches of St. Petersburg, Fla., for the 10th annual IBAA Bancard conference. While snowstorms hit parts of the country, those at the conference sponsored by the Independent Bankers Association of America unit heard predictions of a sunny future in electronic banking. The forecasts came from representatives of MasterCard International, Visa U.S.A., the Federal Reserve Bank of Boston, and other organizations.

*** The first lectures summarized developments in home banking, debit, and smart cards over the past year - a lot of which was news to the small-town bankers in the audience. Speakers extolled the opportunities and stressed the inevitability of electronic banking, and warned that community banks could not remain relevant to the payment system without hitching their wagons to technology's star. "We stand at the edge of a new frontier," said Jody Hancock, senior vice president of global acceptance for MasterCard. She said bankers need to offer a whole new range of services "or someone else will." Paul Connolly, first vice president of the Boston Fed, said the Federal Reserve wants to help banks move toward the electronic payments system. Bankers who drag their feet "will remain stuck with paper-based systems," he said, while other companies reap the profits. Mr. Connolly said the Fed "intends to pay attention to new retail payment systems ... and looks forward to creating and strengthening its partnership with the IBAA."

*** Many speakers threw facts and figures at the audience, covering the growth of automated teller machines, point of sale debit, and home banking, again urging the small banks to keep up with technology. Small banks "don't have to run and hide under the bed," said Michael Bush, senior vice president of Equifax, IBAA Bancard's partner and third- party processor serving member banks. They "are players in this industry," he said. IBAA Bancard chairman David Ballweg, who is president of Community State Bank in Union Grove, Wis., said in an interview that though the frenzy of bank mergers may continue, "we'll always have thousands of community banks" that serve small businesses and consumers better. Small banks can't be leaders in the high-tech world, he said, but they can adopt products quickly once they have been developed. Competition is even more fierce in credit card, but Mr. Ballweg said small-bank programs can be profitable. The secret, he said, is choosing service providers like Equifax and Fiserv EFT - also an IBAA partner - that can deliver services at an affordable price.

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