The West Coast's new banking behemoth is shaping up as a front-runner in the race to offer full-service banking in cyberspace.

Wells Fargo & Co. and First Interstate Bancorp, which are set to merge formally in April, each is offering a wide range of banking services on the Internet - and First Interstate has just unveiled a major upgrading of its site on the World Wide Web. The improved site for the first time lets First Interstate customers conduct banking transactions through the Web.

As the two companies proceed, many bankers are watching closely for insight on how to take advantage of merger-related synergies in on-line banking. The Internet program of the merged bank could stand as a model for other superregionals to follow.

More than 250 banks maintain home pages on the World Wide Web, but these mostly offer only basic information about the banks and their products.

Wells and First Interstate are among the first banks with national stature to enable their depositors to check balances, apply for loans, and make other banking transactions on the Internet. The combination of the two programs could be potent.

First Interstate executives boast that the on-line banking service they launched Sunday is more comprehensive than that of Wells, since it includes a full line of small-business account and loan information on top of individual customer services.

"Unlike what some other banks have done or are working on, we did not just include basic credit card and checking and savings information," said Vincent J. Hruska, vice president of electronic commerce products at First Interstate.

Among the extras the bank is offering on-line are certificate of deposit balances, installment loan balances, lines of credit, and real estate and small-business loan balances, Mr. Hruska said.

First Interstate estimates that 50,000 of its customers will soon participate in on-line banking, he said.

In 1994, First Interstate became one of the first banks to establish its own Web site; last December, it enhanced the site to keep pace with competitors. In all, the bank has spent two years and $1.5 million to launch its on-line banking service, which officials call their "third generation" product.

But even before the on-line service became available, First Interstate officials were meeting with their Wells Fargo counterparts to plan integration of the two Web sites.

"It doesn't take the steam out of it; it just means that it was a short- lived effort," Mr. Hruska said.

The merging banks are cobbling together a plan under which their on-line banking sites will be linked, then integrated, said Randy Kahn, senior vice president for corporate electronic products at First Interstate.

"The overall objective that the Wells folks have articulated is to have the most functionality available to the most customers possible," Mr. Kahn said.

Wells Fargo's on-line banking site initially drew complaints from customers who found that its complex graphics took too long to download and taxed their computers' capabilities. But those kinks have been smoothed out, and the site is now hailed as an easy-to-use role model.

"We think Wells does an outstanding job," said Teri Schrettenbrunner, a spokeswoman for Signet Bank, which will begin offering Internet banking this fall. "They truly have been the leaders in this technology to date."

First Interstate has taken a different approach: Instead of a straightforward menu of banking applications, it presents a set of color icons - a handshake, a fountain pen, a briefcase, and a globe - that are meant to help customers tailor their own banking services.

"We tried to take a somewhat nontraditional bank approach to this, to be true to our overall strategy of focusing on the customer and not the bank," Mr. Hruska said.

First Interstate's Web address is http://www.firstinterstate.com. Customers who sign up for the service by March 31 will get a six-month price break, paying $4.95 a month instead of $9.95.

And as more and more banks prepare to bring their services on-line, First Interstate and Wells Fargo's offerings are being watched closely.

"I'm very happy to see First Interstate's new entry," said Mack Hicks, a vice president at Bank of America who is chairman of the sponsor steering committee at Commercenet, a California-based consortium. "We always encourage other banking institutions to participate in this emerging market."

Mr. Hicks said Bank of America would make its on-line banking service available shortly and that it will resemble First Interstate's "in terms of individualization for the customer."

Mr. Kahn said First Interstate's push to roll out an advanced Web site indicated a shift in strategy. Ten years ago, he said, the bank explicitly perceived itself as "a follower, not like a big New York bank."

But today, the mindset has changed. "We see it as a survivor tactic that we need to be a leader," Mr. Kahn said.

Mr. Kahn said the leadership roles that Wells Fargo and First Interstate have taken in on-line banking indicate the two institutions will have a marriage of the minds. "It says that we have a few philosophical similarities," he said.

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