Though it was the last of the top 10 banking companies to roll out Internet banking to all its customers — in September 1999 — SunTrust Banks Inc. is now on a mission to introduce technology more quickly so that it can nimbly take advantage of business opportunities.

Executives at the Atlanta banking company say their relative tardiness in offering online service caused few, if any, customers to defect to more cutting-edge competitors. Even so, SunTrust says it now wants to move fast on innovations.

The most tangible evidence of this new mindset was the appointment in December of C. Gene Kirby Jr. — who had masterminded Crestar Financial Corp.’s early Internet banking entry — to lead SunTrust’s Internet and e-business services division. SunTrust completed its acquisition of Richmond, Va.-based Crestar in January, a month after creating the Internet division and naming Mr. Kirby its head.

Under his leadership, Crestar had introduced online banking in March 1997, well ahead of most other institutions. Many of the executives who worked with Mr. Kirby on Crestar’s Internet effort have gotten prominent posts in SunTrust’s Internet and e-business unit, which is part of a two-year-old operation called SunTrust Online Inc.

Mr. Kirby said his team of 12 marketing and technology employees is charged with fostering growth on the Internet, developing an e-business strategy, and working with SunTrust businesses to determine how new technology will affect them.

He said he encourages his staff to “think outside the box and look for new ways to build e-business and help other parts of the bank understand the impact of technology.”

Banking companies such as Chase Manhattan Corp., FleetBoston Financial Corp., and Wachovia Corp. have created similar divisions that are supposed to spread the Internet gospel and help business units handle the strain of incorporating new technology while managing their regular duties.

In SunTrust’s case, the Internet was not being addressed evenly across the enterprise, Mr. Kirby said. “SunTrust was under way in the world of e-business,” he said, “and it had a lot of projects, but what was needed was a coordinated view from a companywide perspective.”

One of SunTrust’s first steps was to consolidate its 27 banking charters. “Rather than having each individual bank having its own plan, we now have a cohesive view on how we want to create the Internet,” Mr. Kirby said. This consolidation identified the Internet and e-business “as key from a funding standpoint.”

Mr. Kirby’s discussions with the company’s business heads helped flesh out its Internet strategy. “We developed a comprehensive view of what the competencies were and what was necessary to fill, in terms of core infrastructure, to achieve the internal vision,” he said.

SunTrust’s move to a single charter is meant to put it in a better position to introduce products and technology quickly throughout its network.

Lori B. Appelbaum, a banking analyst at Goldman Sachs & Co., said SunTrust’s consolidation efforts “will make them more efficient and allow them to have a better cost structure.”

In August, SunTrust appointed four vice chairmen to oversee its multiple lines of business. James M. Wells 3d, former president and chief executive officer of Crestar, was named vice chairman and put in charge of commercial, retail, mortgage, private-client, and corporate strategy lines of business, as well as of the Internet efforts.

Mr. Wells said SunTrust’s Internet strategy “is to invest sufficiently in order to take advantage of the opportunities as they come up and have the option to do what needs to be done.” The company expects to make “a constant investment in the process so we can be in the right place when the obvious answer shows up,” he said.

So far the obvious answer excludes commitments to some of the more advanced online functions that other companies are introducing, such as account aggregation, wireless account access, and online marketplaces for business customers.

Mr. Kirby said that SunTrust will not “move down a path where everything is on the Internet” but instead will use the Web “as another channel for customers to choose.”

To protect itself against brokerages, SunTrust plans to offer online investing and mutual fund services. The company is considering setting up a full-service portal to offer online investing services and mutual funds, as well as core banking services, to retail customers.

Mr. Kirby said he does not worry about other banks taking his customers but does worry about brokerage competition.

“Brokerage is one of the fastest-growing services,” he said. “Those companies that get a foothold will eat away at the core banking relationship. The concept of offering our clients a centralized point, as well as access to new tools in a very customer-centric way, is part of what we need to do. The portal approach will allow us to build our Web presence and to get that stickiness to see them come back.”

For now SunTrust is waiting to see what impact wireless banking and business-to-business marketplaces will have on the industry, Mr. Kirby said. “Wireless banking will be a major part of the Internet, but there is still a lot to be settled in terms of security and privacy.” he said.

His initial efforts have focused on invigorating SunTrust’s basic online banking products. When the deal for Crestar was announced in 1998, SunTrust offered only a general Web site, with information about the company and its products, dial-up links to account information for users of Quicken and Microsoft Money, and call-center banking.

Crestar, meanwhile, was the “fifth or sixth bank” to introduce online transaction capabilities, Mr. Kirby said. “We got out of the blocks quickly and had a unique value proposition in the marketplace for a short window of time.” he said.

SunTrust has adopted Crestar’s online banking platform, which was provided by Corillian Corp., as its own.

Ms. Appelbaum said the “business strengths of Crestar were the things they were doing in consumer and direct activities — activities outside the branch network.” Crestar “understood alternative distribution methods,” she said.

Now 10% of SunTrust’s customers — most of them, admittedly, from the old Crestar — use the Internet to look at their accounts, pay bills, and transfer funds. The online service is free for 90 days, then costs $5.95 per month for personal accounts and $7.95 a month for small-business customers.

Its online customers have higher balances and are more likely to buy additional products than its standard customers, Mr. Kirby said. The Internet “allows us to offer customers more reasons to stay with the bank,” he said.

SunTrust’s Web site was ranked 48th of 58 sites surveyed on Gomez Advisors’ summer 2000 Internet Scorecard. Paul Jamieson, senior analyst for banking and payments at Gomez, said that the company still has “some ways to go, but for a fairly large regional bank there is no reason to think that they can’t play catch-up.”

The company “needs to have a fully functional Internet offering so that current customers don’t defect,” Mr. Jamieson said, “and that is the big risk they have right now as competitive banks build out richer Internet sites.”

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