Move over, everbank.com comes to Stowe

Vermont Business Magazine, Mar 01, 2000 by Barna, Ed

At a time when mergers have cut into the number of well-paid banking industry jobs in Vermont and across the nation, the decision by everbank.com to locate its marketing and product development center in Stowe has been a welcome development.

But at the same time, it's a reminder that there is yet another source of competition for traditional banks, who in this state have already been hammered by the ability of loan and finance companies and credit Unions to operate free of many regulatory demands. Online banks are perhaps the clearest expression of the new reregulated banking environment, operating with little regard for geographic or functional boundaries, and willing to translate low overhead into aggressive offerings that justify skimpy profit margins by garnering larger market share.

Nor is this simply a tradeoff in which customers accept a lower level of service in return for a somewhat higher rate of return on deposits or a lower interest rate on loans. Ask everbank.com what they consider their competitive advantages and service comes up high on the list.

In many ways, online banking appears to offer many of the same challenges to traditional banks that online discount investment services did at the beginning of this decade, when many thought they posed no significant threat to the old-line Wall Street brokerage houses. That revolution has not only made the online firms good stock investments in themselves, it has furthered a flight of capital into equities that continue to pose difficulties for banks of all kinds.

The Stowe office for everbank.com, where product manager Pam Hattin said there are eight staff members, is part of a two-year-old operation that remains extremely lean. The rest of the company consists of about eight people at the official St Louis headquarters, a half dozen people at a call center on Long Island, and another half dozen in Florida, where the real estate products are handled.

Everbank.com is a division of the Wilmington Savings

Fund Society, FSB (WSFS), a major banking company

headquartered in Delaware. WSFS Financial Corporation

is a,$1.7 billion financial services company. Its principal

subsidiary, WSFS, operates retail-banking offices in New

Castle County and dover, DE, as well as Chester, DE,

and Montgomery Counties in Pennsylvania. Other

operating subsidiaries include 838 Investment Group,

Inc.; everbank.com, Wilmington National Finance Inc.;

and WSFS Credit Corporation.

The Stowe office of everbank.com opened for business early in February with an open house, where 60-70 visitors had an opportunity to see a Website demonstration.

"It went very well," Hattin said.

With their far-flung team, everbank.com has been able to put together a product line that includes checking accounts, certificates of deposit, credit cards, stock transactions, mortgages, homeowner's insurance, and title insurance.

"We just keep building," said David Galland, the director of marketing. He said gomez.com, which rates online businesses, has them in the top 10 of online banking - in the company of heavyweights like Wells Fargo, Citibank, Telebank and American Express.

Galland said it was Rob Foregger, a Vermonter who is now the director of product and business development, who began developing the business plan for everbank.com and then had the idea of putting part of

its operations in a place where he knew there would be

good recreational opportunities and a high quality of life.

Galland left his job with First Union in 1997 to join Foregger, with whom he had worked in a manufacturing business 12 years ago, and they were joined by Frank Trotter, now the president, and later Kyle Meyer, the cofounder of American Finance and Investment.

"It's all going in the right direction," Galland said. In many ways, it's easier competing in the smaller banking universe, compared with the 7,000 or so manufacturers that impacted his former business, "That was competitive," he said.

The products with which everbank.com attracts clients include checking, accounts: that pay more than 6 percent interest ($1,500 minimum deposit) online payment of bills ("You'll say, 'How did I ever live without this?' " Galland said of the timesaving process of merely entering an amount and clicking on a link to make a payment), a credit card with a rate 1.9 percent above the prime rate, a line of credit from which money can be drawn literally in seconds, superfast loan approvals, and a stock market service that, among other features, allows a customer to create a personal "index" of stocks in which to invest.

"Service is very important to us," Galland said. Banker's hours at everbank.com are 24/7, and. though some of those must be covered by a contractual call service, it's one that everbank.com is constantly working with to improve the level of response and the degree of customer service.

"We can't be all things to everybody," he said - they don't expect to duplicate what bricks-and-mortar community banks provide in direct personal service, for instance - but their mission is nothing less than to reinvent banking.