First Internet Bank

www.firstib.com

In a July visit to France, we were surprised to see several full-page First Internet Bank of Indiana (Indianapolis, IN; $47 million) advertisements in USA Today’s international edition. The first ad on July 7, used a patriotic Bank Free theme, with a USA flag motif. The second ad on July 22, was more bizarre. “Bank Naked.” in huge, funky letters on the top half of a mostly blank white page dominated the 15-word ad. In the lower-right corner was the bank logo and Web address along with the brainless tag line, “Do your banking at firstib.com no matter what you are wearing. Or not wearing.” It was unusual to see a smaller company with such a big ad in the much thinner international version of the big USA paper. Most issues have just four or five full-page ads, including daily spreads from Sprint, MCI, AT&T and the occasional automobile ad.
Contact: Dave Becker is CEO, (317) 558-7900.

First Internet Bank of Indiana Launches with Real-time Focus

www.firstib.com

 
First Internet Bank of Indiana (FIBI) is the first to put real-time chat on the Web. It has great potential, although this implementation is sloppy. Not only could we not get it to work on Netscape 4.0, it’s so poorly explained, we’re not sure that any legitimate prospects would use it.

Users must submit a “First IB Real-time Chat Request,” then wait while someone “takes over your browser to give you a tour of the Web site.” We just wanted a simple question answered.

FIBI would be well-advised to emphasis “real-time answers” vs. chatting, which is something your teenagers do on AOL.

The Company: First Internet Bank of Indiana (Indianapolis, IN; $15 million) is the third company from Dave Becker. He also founded re:Member Services in 1981 and Virtual Financial Services, Inc. in 1996. re:Member Services www.remember.com provides data processing services to credit unions and Virtual Financial Services www.vifi.com builds Web sites and Web banking services for the same audience. Currently, 24 credit unions use its Net banking platform.

The Business Model: First Internet Bank of Indiana (FIBI) has a dual purpose:

1. Testing ground, proof of concept, and real-time usability lab for new Web features invented by sister company, Virtual Financial Services.

2. Standalone bank capable of turning a profit on its own, but more important, attaining a high market valuation for possible merger or IPO.

Product Line: FIBI launched with the usual products: money market savings, interest and non-interest checking, unlimited bill pay, free ATMs, and consumer loans. They are also in discussions with partners to launch insurance, mortgages, and stock trading by year-end. Becker expects to match or beat ATM surcharge rebates pioneered by Telebank and quickly copied by CompuBank.

Marketing Strategy: The bank has crafted a clever positioning around real-time banking, claiming to be the only bank that processes transactions and updates all information databases (Net, phone, ATM) in real-time. Its tag line is “Real Online Banking.” The bank hopes to develop a beach-head in Indiana that can be leveraged nationwide. During its first week, 40% of its account applications were from within the state of Indiana.

Like SFNB, TeleBank, Net.B@nk and USAccessBank , FIBI intends to pay premium deposit rates with an aim at being a “top five (highest) rate player.” With more and more virtual banks hoping to gain prominence on Bank Rate Monitor and other rate rankings, premium deposit pricing may be a prohibitively expensive marketing strategy.

Contacts: Dave Becker is CEO; John McCreary is SVP of Deposit Operations, (317) 558-7900.