A true believer in Internet banking and commerce, Marshall & Ilsley Corp. not only seeks to replicate its banking services on-line but the immediacy of a branch and even a neighborly environment in Cyberspace where customers can talk with one another.

M&I’s own banking Web site has all the bells and whistles provided to the banking clients of its technology outsourcing arm, M&I Data Services, as well as the clients of Security First Technologies, the providers of the cutting-edge Internet banking software. What differentiates M&I’s site, however, is its effort to build an on-line community. The bank sees its Web site as a means to get to know its customers better, rather than simply replicating services on-line and cutting down on customer contact.

A year-old program has given 10,000 bank customers their own home pages that can be accessed through the bank’s Web site, a process Garry McCann, manager of on-line banking for M&I Corp., described as "the start of building an on-line community with customers like you would at a branch level." And, although it might seem the point of the Internet is to bring all customers the same level of service, the bank plans to roll out its first site for an individual branch by the end of the year.

"The virtual branch will take them (bankers) down to a level where the customer is communicating with their branch only," McCann said. The benefit of this arrangement is to strengthen relationships, and tie the customer to a banker who can work with his or her individual financial goals. Also, through the virtual branch, customers can learn about events going on at their local branch that they might have only found out about before through fliers in the building itself.

Another new bell the Web site will be rolling out by the end of the second quarter is its on-line brokerage, called MIBROKERONLINE, which will enable customers to trade on-line and see quotes in real-time.

M&I, which is a major outsourcer to community banks, not only sees getting into e-commerce as imperative for its own survival, but for its bank customers, too.

"The primary reason is delivery channels change over time," said Mike Hatfield, senior vice president and secretary of Marshall & Ilsley Corp. "The volume of traditional channels is declining, but Internet and telephone are growing at tremendous rates. If you want to continue to be in the business, we feel that if we get that hookup with e-commerce we can be viable," he said.

The $21-billion-asset bank is not only the biggest independent bank in Wisconsin, but it may become one of the leaders in home banking, following its recent acquisition of Moneyline Express, the e-payment component of Traveler’s Express, which has 20% of that market.

The company is the only other significant e-payment provider besides industry leader Checkfree, which provides a "pay anyone" service. Pay anyone means that a consumer can enter any biller onto his or her bank’s Web site and that party will be paid. Many systems now can only pay parties the bank or provider already have a relationship with.

Add to that last month’s acquisition of ADP’s electronic banking division, expected to close at the end of this month, and M&I has the business banking piece of the e-commerce puzzle. The three products it acquired from ADP, Business Express, FORTExpress and Cash Express, are cash management programs for businesses that are used by 120,000 corporate clients.

The company plans to integrate Moneyline Express’s pay-anyone capability with the ADP products to provide its bank customers with a business-to-business electronic payment service to offer business customers. Before this year’s Moneyline Express purchase, the bank already had 200 banks outsourcing this service, and it’s working to keep the 500 belonging to Traveler’s Express. The two acquisitions are components of M&I Data’s recently created electronic banking division. The business from the ADP purchase is estimated to bring in $40 million in revenue this year; estimates were unavailable for revenue generated from Moneyline Express.

The only piece of the puzzle missing is e-bill presentment, and industry watchers are eagerly watching to see which way M&I goes.

Mike Hayford, executive vice president of corporate development at M&I Data Services, the bank’s technology arm, said the company, for now, is going to focus on absorbing its new purchases. However, it is thinking ahead to develop an e-billing component. "But I don’t believe it will be via the acquisition route. It could potentially be an alliance or partnership, or we’ll build it ourselves," he said.

So why is the ability for a customer to pull up bills on-line all at once important, since only a small number of billers have relationships with e-bill presenters, and the rest of the consumer’s bills must be acquired over time from the paper mail? Because, as with all things tech, it’s the wave of the future, bank officials said. They believe bill payment service, which is gaining popularity with consumers now, will become even more popular when more billers present their bills on-line. Hayford said he thinks billers will start to provide the service more when they see the economic benefits.

"We think banks have a real opportunity to participate (and) we think banks should be aggressive in pursuing relationships with consumers through electronic banking means. The reason we believe that is we do think the payment system is going through changes and banks have the risk of somebody else coming in and providing those services. We try to make sure we have those products to offer," Hayford said.