Many bankers feel compelled to dabble on the Internet, perhaps through a modest Web site or home banking service. But Robert E. Evans is having none of it. "We're not sure that it's going anywhere," said the vice chairman of Twin City Federal Bank in Minneapolis.

Reading aloud from a newspaper article that said bankers who ignore the Internet are going to be left in the dust, Mr. Evans just laughed. "That's the same sort of hyperbole we were hearing 20 years ago when they were saying the checkless society was just around the corner." At least he has an opinion. While most financial institutions larger than his $7 billion-asset thrift have at least begun to dabble, thousands of bankers, from second-tier regionals down to the small-community level, are just plain confused. How might a bank with limited funds experiment with delivery channels that customers may in the end reject? And how does one choose from among the dizzying array of products and delivery options that big banks are promoting, like screen phones, personal computers, and the Internet? "You go on with your business day to day, and all of a sudden you look up and notice that you're missing a pretty significant happening," said John F. Poepl, chief executive officer of the Vermillion (Minn.) State Bank. A few community banks have become technological swashbucklers, but the majority echo Mr. Poepl's opinion. Check imaging and telephone banking have gained considerable popularity among smaller banks, but the jury is still out on most of the more advanced options. "I think most people are perfectly willing to sit back for a while," said Marvin H. "Mike" Potter, chief operating officer of a for-profit subsidiary of America's Community Bankers, a 2,000-member trade association. "People are waiting on the sidelines, saying, 'How do I make sure I'm not handcuffing myself to a particular device that may soon become obsolete?' " But interest in new channels has grown significantly over the last year, Mr. Potter said. More and more small-town bankers are reciting the mantra that technology can give small banks a hand in their effort to compete against bigger institutions. "It's the old analogy of turning around a canoe versus an aircraft carrier," Mr. Potter said. "Once it makes its decision, the community bank can move much more quickly." Among the small banks embracing technology wholeheartedly is Britton & Koontz First National Bank of Natchez, Miss. This $150 million-asset bank is investing $1.2 million in technology over the next two years. It has already made its mark locally by becoming the sole Internet provider in southwestern Mississippi. "Our bank has become the talk of the town," said W. Page Ogden, the president. In a town of only 20,000, Mr. Ogden said, 400 people have signed up for the Internet service the bank has offered since October. Subscribers immediately access the bank's Web site, which features a demonstration of an electronic home banking product Britton & Koontz plans to introduce this fall. "We plan to marry check imaging to our electronic banking product, so you'll be able to see the statement and the checks at home on the Internet," Mr. Ogden said. "You'll be able to take out a loan application or read messages from the president. Basically, it's another major communication device for us with the local community." Mr. Potter termed Britton & Koontz's investment "gutsy," and said most community banks are working on more modest efforts to prepare themselves for whatever "devices du jour" the future may bring. "If you keep yourself device-independent, make sure you're flexible enough to go into any device or any pipeline. I think that's clearly the winning strategy," Mr. Potter said. That's the strategy David Kern is implementing at Bank Independent of Sheffield, Ala., where his title is cyber bank manager. He said he has been charged with developing an electronic banking department that includes everything from automatic voice response to PC and Internet banking and cash management for businesses. First things first: the $250 million-asset bank is installing four ATMs. "Right now we're just talking," Mr. Kern said. "We just know it's coming. You have to lay the foundation." Bank Independent serves four towns in northern Alabama. Mr. Kern said a few customers use personal financial programs like Intuit's Quicken and Microsoft's Money, and the bank had hoped to provide a compatible PC banking product. But so far he has been frustrated trying to find a vendor that can deliver such a product. "It's not exactly feasible for a community bank to sign up with Quicken," Mr. Kern said.

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