Banks bet on b-to-b

James Dixon, executive, Bank of America Corp.

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Q: You got your job in February. Since then, BofA has undertaken an array of b-to-b projects. Which are most important? What are the bank's goals?

Dixon: We're starting with the presumption that we should think that all of our customers are going to go online. That's already true for our 2.2 million retail online banking customers. And as far as small and large business customers go, the presumption is even stronger. [Bank of America has 1,500 corporate and 1.7 million small-business clients.] The Internet is an even bigger tool for them.

Small-business people from a personal standpoint and a business standpoint are presuming they can do most of their business, not just financial, online with Bank of America. We shouldn't view ourselves just as providing a financial arm. For example, we're planning a robust build-out of our Bank of America small-business platform.

The Biztro Inc. deal is important. [Last month, BofA contributed to a $33.9 million investment in Biztro, a b-to-b small-business portal and exchange. BofA is marketing to its small-business customer base, the largest in the U.S.] The Biztro platform gives our customers the ability to buy telecommunications services. This makes running their lives easier.

So what I'm talking about is an overall point of entry for our small-business customers. There's no reason why we can't provide that to them.

Finally, there are a tremendous amount of b-to-b exchanges out there. We intend to integrate ourselves into them.

BtoB: Bank of America announced in April that it is teaming with Ariba Inc. to introduce a financial services engine that will tie into other exchanges. It will also lead to e-procurement for BofA's customers. This is a harshly competitive field. How does BofA intend to compete?

Dixon: The look that we took was that obviously we wanted to get Ariba'sprocurement capabilities for ourselves. And we also know we're not the first to offer these services to an extended customer base.

We teamed up with Ariba because we're trying to bring the Web to our customers. We don't have the view that we should go out and produce these things on our own. Ariba has a good technology platform to begin with. What we have, however, are about 2 million small-business customers.

We'll be adding other products from other platforms and integrating them into the Ariba platform. And we're going to build out the financial services platform that will build the engine that will deal with, for example, invoice recognition, whether by credit card or another form of loan.

What we are not going to do is sit here and claim we'll be the best just because we have the most unique product. It's how we bundle these things and give them 24-by-seven service that matters. And it's something we're good at. We're accustomed to running technology platforms.

BtoB: You have a financial and technology background. You were CFO of Sovran Bank, a BofA predecessor bank. And before taking over BofA's Internet strategies you were the bank's chief technology officer. How does this background help you plan b-to-b Web projects?

Dixon: The financial background helps because BofA's Web propositions are basically start-up propositions. You can't declare victory just because you're on the Web.

The tech background is important because it lets us leverage our customer base not just to create things and let them sit there online. You need to leverage them with the physical space. It requires a total business background and technical background to do this.

BtoB: BofA is teaming with Chase, Deutsche Bank AG and 17 other banks on Identrus. How important is this deal to BofA?

Dixon: Identrus is something that is very global and involves payments. That's not something you want to do on a proprietary basis. That makes no sense. When there is an existing technology in place, as with Identrus, and you've got a large group, you can bring instant scale to a proposition. A consortium here makes sense.

BtoB: Some e-finance brokerage analysts said the major banks, BofA included, have a long way to go in the b-to-b Web space. They also said banks risk being disintermediated by tech vendors. Your thoughts?

Dixon: If you stand still you do risk being disintermediated. But if you have a wonderful customer base and the technology vendor has the technology, you can partner. That is why we've done deals with Ariba, HomeAdvisor, Identrus, Checkfree Holding Corp. and others. Like I said, I think everybody has to move fast in this marketplace.

BtoB: BofA has lots of tough competition. Wells Fargo & Co., Deutsche Bank AG, Citigroup and others are all going big into b-to-b. How will BofA compete?

Dixon: Our main focus is not on our competitors, but on demonstrating that we can provide what our customers want. And we want to redefine convenience for them. We have a large installed customer base, we do understand technology and we understand what makes things work.

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