Taking the ramp to the information superhighway.

Is my bank ready to develop a web page? What experiences have other hanks had, and what should I consider before developing a website?

Los Alamos National Bank of New Mexico had many problems when it tried to put up a home page on the Internet. The bank initially sought to find a staff

As reported in the American Banker, Feb 21, 1997, in an article entitled "Snagged in the Web, How One Bank's Confident On-Line Plans Unraveled," the bank had several production delays and cost overruns. Bank executives had misread the contract and had to pay a lot more for the site than they anticipated. The vendor also had problems with the bank and complained that bank employees were unfamiliar with the technology and ambivalent about what they wanted the website to reflect.

Another complication to the ordeal was that the bank was planning to move into a new building and was switching to a new operations system at the same time. The bank wanted a transactional site but, because of cost overruns, settled for a site that is not interactive. Los Alamos National learned that it needed more knowledge about what to expect from a vendor and a better understanding of Internet technology.

In the Journal of Retail Banking Spring 1997 issue, "Becoming Internet Access Provider Expands Horizons for Apollo Trust," Raymond E. Muth, the bank's executive vice president, reports that the Apollo Trust not only put up a website, but became an Internet service provider. Muth taught himself a lot about computers and first established an electronic bulletin board system. The BBS was a hit with the community. Next bank officials planned to set up a home page on the Internet, but the small, rural community had no Internet access.

Muth learned that it would be a very difficult task to become an Internet service provider because of the cost of turnkey operations and lack of knowledge. A college student called the bank and volunteered to help the bank provide unlimited Internet access using UNIX. The bank invested only $20,000 in hardware. Apollo bank got approval from the Pennsylvania banking department banking to become an Internet service provider as long as it was offered for free. After some creative thinking and pro bono legal help, the bank obtained approval from the OCC and later the state's banking department to form an Internet subsidiary and to charge fees for access. The bank administered the system on nights and weekends.

The web page was used primarily to sell the community and not the bank, but it was well received. The secretary of education from Bosnia, who was visiting nearby University of Pittsburgh, saw the Internet site and devised a chat room used by people throughout the world. The bank later designed home pages for other companies in the area such as car dealerships and real estate companies. Apollo Bank also collaborated with a local computer vendor to sell computers to customers using low-interest loans and with payments automatically deducted from Apollo Bank checking accounts. The bank also attracted many new customers, including one school district that moved all of its accounts to the bank.

"By providing Internet access, a community bank can maintain its customer base by offering its electronic banking products on the front end or the on-ramp to the Internet, in addition to its website," Muth adds.

Busey Bank of Urbana, Ill., had a very successful venture on the Web, according the December 17, 1996 American Banker. In an article entitled "Community Bankers Hurrying onto the Internet," the bank president, Dave Kuhl, invested between $100,000 to $200,000 in online technology and assigned three bank employees to the task. The bank enables customers to perform transactions on the website. Busey Bank offers all the latest delivery channels for banking including, ATMs, bill payment by telephone, PC banking, debit cards and supermarket banking. Busey Bank also subsidizes bank employees' purchases of personal computers for home use. They can also take classes to learn spreadsheet, word processing, and presentation software. Busey Bank's knowledgeable bank president encourages all employees to learn as much as possible about the latest technology.

"Any bank that isn't offering home banking products or phone banking isn't ready to make the leap," according to the American Banker, October 23, 1996 article entitled "Building a Web Strategy Shouldn't Be Left to Techies."

Here is a checklist of considerations gleaned from "Making Dollars and Cents Out of the Internet," and "Paging Community Banks," which appeared in the January 1997 issue of Bank Marketing. Finally, there are some useful tips from Bank Automation News, February 7, 1996, "Web Technology Costs Getting Steeper."

Outsourcing Web page development

* Select a design firm that under stands banking and/or has worked with other financial institutions.

* Look at sites the company has created for other customers.

* Get several company price quotes.

* Discuss the company's technological capabilities and verify speed at which hosting company connects to the Internet.

* Use your company name as domain name, omitting hosting company name. (http://www.yourname.com)

* Implement the project in phases with checkpoints to maintain quality and control.

* Negotiate separate fees for upgrades, maintenance, site design and development.

* Obtain a service contract that details who is responsible for fixing problems.

In-house development

Assign staff person to project. Invest in technology and train staff.

General considerations

* Establish your home-page concept.

* Make the site simple to use.

* Put a map of the entire site on the home page.

* Each page should have links to organizations in your community.

* Put website and e-mail addresses on brochures, business cards and letterhead.

* Promote the site on and off the Internet.

* Keep the site interesting by having interactive online response forms, e-mail and bulletin boards.

* Develop the consistent content of your site with all promotional materials.

* Market the site by listing with various search engines.

* Be prepared for the unexpected and be prepared to learn a lot.

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