Among local financial institutions, it was the Bank of Bermuda that pioneered Internet banking for business clients early last year when it launched eBankline.

With a bit more hype, the Bank of Butterfield followed 12 months later with Butterfield Direct and, just recently, Bermuda Commercial Bank (BCB) promised that its e-banking venture will debut before the end of the autumn.

But the Bank of Bermuda has not been a pioneer of Internet banking for retail clients (that title goes to Bank of Butterfield, which introduced personal and business Internet banking at the same time).

Bermuda's largest bank has no online service for personal account holders, and since eBusinessline was introduced, the bank has released scant details of the remainder of its Internet strategy.

According to spokespersons, the bank is developing an Internet banking service for personal account holders, but none will say when it will be commercially available. Technical issues, they claim, still need to be addressed.

"We are well along in the development of an online banking service for retail clients," said Peter Smith, the bank's head of corporate communications.

"But we do not want to predict when it will be available until we have tested it and re-tested it and we are absolutely confident the system is ready and reflect the highest available security standards."

Industry insiders predict that the Bank of Bermuda's service will be introduced within the next year.

"I would say that they are probably looking at what the market is offering now and trying to offer something superior to what is presently available," said Alvin Wilson, the vice president and managing director of Bermuda Financial Network, which offers an online payment service of its own.

When the Bank of Bermuda's service is introduced, it will likely include the features of Butterfield's service, which allows customers to check their account balances, pay utility, insurance and credit card bills, transfer funds between accounts, execute wire transfers or request bank drafts - operations which are, for the most part, already available through both major banks' automated teller machines.

The service could also allow customers to invest online, as BCB proposes to offer.

(E-banking, proponents claim, will also help the bank cut administration costs by reducing the number of manual transactions and even the maintenance requirements of ATMs).

Yet until it is introduced, Bank of Bermuda customers have to make do with a website, which was set up in 1997 and overhauled two years ago. But bankofbermuda.com is primarily a marketing tool for the bank, according to Mr. Smith - and is thus relatively static.

The section devoted to retail clients, for instance, consists of a list of available services and is currently "under development".

The interaction lacking on the website is available through a telephone banking system, which the bank introduced in the mid-1990s and still promotes heavily. When customers dial a telephone number, they can conduct most of the transactions they would otherwise do at an automated teller machine, except withdraw and deposit money.

But the system, which requires customers to enter information with number keys and receive account balances via a recorded voice, is more cumbersome and time-consuming than a computer-based system. Every time a user checks the balance on their credit card, for instance, the computer reads out the customer's credit card number (slowly, and all 16 digits) before saying how much credit is available.

"The telephone access has filled the gap for them," said BFN's Mr. Wilson. "So far, I don't think they have suffered by not having an Internet banking platform."

"But telephone banking is not sufficient, it can't last," he added. "And the bank is very aware of that."

His assessment is based, in part, on the online success of BFN. In October of last year, the company launched Easypay, which allows customers to pay Bermuda bills or transfer funds between accounts at any of the banks online.

Almost 5,000 subscribers have signed up and 450 businesses, from doctors' offices to landscapers, are equipped to receive payments through the system.

For the six months before Butterfield Direct hit the market, Easypay was the only game in town for personal online banking.

Now, with banks developing their own platforms, BFN will certainly face some competition. But Mr. Wilson is convinced that Easypay, which derives revenue from monthly access fees or per-transaction charges, will survive because the service lets customers pay more people and businesses. He added that Butterfield customers continued to sign up for Easypay after the bank went online.

To create service comprable to Easypay, the banks would need to develop detailed reporting systems for companies receiving payments, and Mr. Wilson does not see that happening anytime soon.

But Butterfield's platform (and presumably the Bank of Bermuda's, once it is launched) offers other services unavailable on Easypay, such as wire transfers and the capability to order bank drafts and manager's cheques. According to the bank, customers' response to e-banking has met expectations.

Still, the bank has not yet identified any decline in ATM or personal teller use - which would reduce the overall cost of serving retail customers - since Butterfield Direct ws introduced. But the service is only five months old, so it is still early days.

"We are singing up new corporate and personal customers daily," said Ed Benevides, the bank's vice president of e-commerce. "Time will tell how the level of use of our other banking channels will be affected."

Meanwhile, Bank of Bermuda has not yet wooed shareholders with the prospect of decreased costs associated with Internet banking.

But choosing caution over hype may prove worthwhile for the bank.

Consider the case of BCB, which announced its Internet banking platform with much fanfare at the end of 1999, and set a launch date in January 2000.

January 2000 passed with no launch, and since then BCB has set several introduction dates and failed to meet them, while the bank's web page at bermuda-bcb.com remains "under construction". Each time it missed a deadline, the company endured embarrassment and bad press.

The latest autumn date, which was revealed during an interview on Tuesday with Timothy Ulrich, the bank's new president and chief executive officer, is not yet firm. But this time, BCB might acutally meet it: according to Mr. Ulrich, about 80 pilot customers are successfully using the system already.