CompuBank Works to Build Online Customers

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The war cry at, Houston, TX, "Get out of line. Bank online!" is a promotion the start-up online bank hopes will help build a national consumer base and establish itself as a dominant player.

"Our goal is to be the pre-eminent Internet bank on the Web," said Jonathan H. Lack, executive vice president of marketing and planning.

CompuBank -- which started last fall with an initial investment of $6 million -- faces stiff competition from Wells Fargo, Citibank and other established banks, which not only have greater name recognition, but are able to convert customers of their physical branches to online equivalents.

"It is a lot easier to convert a customer than to acquire a new one," said Chris Musto, senior analyst at Gomez Advisors Inc., Concord, MA, a research consultancy focusing on Internet commerce.

CompuBank's promotion efforts, however, extend only to quid pro quo and pay-as-you-acquire deals with fellow Web marketers.

"CompuBank's strategy is to find ways to get business referred rather than go out and acquire customers," Musto said. "This is a model that makes sense for a product that has limited funding. The bottom line here is that CompuBank doesn't have a brand name, so it piggybacks off branded communities, and it pays them as accounts are acquired."

According to a recent survey of 55 Internet banks by Gomez Advisors, CompuBank was ranked first in ease of use and second in cost savings.

At the core of CompuBank's services are features that take advantage of the digital age, such as real-time processing, the ability to view transactions for the past year, wire transfers and one-click customer service. With $200 and a few minutes to complete an online application, consumers receive instant approval.

But alienating itself from prospects who want one-stop banking services, the bank does not offer loans to its customers.

"It's not going to succeed by offering only deposit services," Musto said. "It needs to offer credit cards and mortgages.

"It needs to cast a wide net to get a bigger population and to think creatively with each alliance and each site community it serves," he said.

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