Wait-and-See Strategy Pays Off for BB&T

At a time when many financial institutions feel the need to quickly push product into the Internet space, BB&T Corp. has decided to take a slightlydifferent approach, at least when it comes to Web-based cash management services. The $55.4 billion bank's strategy: take some time to carefully assess the market and competing technology before introducing a new service or product.

"We see a lot of our competitors jumping out there with this 'build it they will come' type of approach," said Anne O'Toole, manager of treasury services product management at Winston-Salem, N.C.-based based BB&T. To O'Toole, such pioneering efforts are full of risk-and can only be made worry-free if time is taken to understand the market and create a superior product. "By the time our clients really have a desire to use it, we're right there," she added. "That allows us to do it more cost efficiently and benefit from those early developers."

The bank's latest service, CashManager OnLine, offers commercial clients and small business owners an Internet-based information reporting and transaction initiation system that provides real-time access to their accounts. Using a Web browser and PC, CashManager OnLine allows clients to access previous and current-day business account information, place stop payments, initiate domestic and international wire transfers, and transfer funds between accounts. Added features will include loan information, bill payment functionality, and check image capture and reporting.

The service had been under development for 12 months before its introduction last summer. In 1999, BB&T was surveying all of its business customers to determine their capability and preferences for online cash management. At about the same time, PSI Global, a Tampa, Fla.-based research firm, released survey results revealing that 60% of major banks were offering corporate cash management services over the Internet.

"At that time, we found that 95% of our client base had access to doing business over the Internet," said O'Toole. "Although online cash management had been discussed for the last two-to-three years, we waited until we saw real evidence that the client base was ready."

The service, which is run and managed by Germany-based Brokat, attracted 200 clients during its first weekend of operation last summer. Within a month, it had gained another 400 clients.

Surprisingly, about 30% of customers using the service are new. "We had built the business case on avoiding the loss of business and didn't think by offering this service we would increase business," said O'Toole. "We were being very conservative in our approach."

In the next 12 months, BB&T will begin working on wireless access for CashManager Online.