Electronic Signatures Will Eliminate One of the Real Limits to the Expansion of our Business on the Internet

In Conversation with Brett N. Silvers, Chairman and CEO, First International Bank

A pioneer in leveraging e-business in the financial industry, First International Bank is a recognized leader in looking after the vibrant small businesses that today’s mammoth financial institutions tend to ignore. This conversation with Silvers is part of an on-going series in which ebizChronicle.com explores key segments of the evolving e-business economy with senior industry executives.

First International Bank had already carved out a space for itself in corporate banking before the Internet. This space is occupied by small industrial companies that require all the sophisticated products, which the huge financial institutions provide to their large global customers. "We recognized this years ago," says Brett N. Silvers, who has steered the bank to its leadership position and runs it from his Hartford, Connecticut office.

"These dynamic companies have sales in the range of $1 million to $50 million, are conservatively run and generally profitable, and are constantly trying to improve their infrastructure. Once we had identified them, we also discovered that these companies are quite sophisticated. Not just here, but all around the world," he says.

What this means in practice is they are used to working with computers, electronic data interchange (EDI), and now the Internet. These companies have had to ramp up the technology curve quickly to keep the business, in most cases provided by their technologically savvy customers higher up the supply chain. Having established itself as a provider to these companies pre-Internet and thereby establishing a first mover status, First International found that its web-based products simply expanded the points at which it could touch these companies.

"These companies are generally family owned," explains Silvers. "Whether they are in St. Louis, Brazil or India, they have adapted to the ways of their customers who are in many cases local operations of sophisticated multinationals." These multinationals may have regional headquarters that insist on computerized purchase order and shipping documents, online receipts notification, and billing and other such automated processes. If their suppliers are not able to meet these technological challenges, these companies are simply able to replace them – in their country or another country.

"Since we developed our online $5-million financing capabilities, we have had plenty of interested parties," s plenty of interested parties," says Silvers.

In fact, the bank has done so well with its core business of lending to small industrial companies, originating over $550 million in loans just in 1999 alone, that the U.S. Commerce Department awarded it the President’s "E" Award For Export Service in May 2000.

First International has capitalized on a trend that began at the U.S. Ex-Im Bank in 1992. It was a turning point in the agency’s support for small businesses. The agency today aggressively backs small business loans, such as working capital loans to help U.S. companies fill export orders, and inventory and equipment loans to help foreign companies purchase goods made in the U.S. Silvers notes that the U.S. Overseas Private Investment Corporation also recently entered the small business scene with a new program that guarantees and insures small U.S. companies interested in direct foreign investing.

Since joining the company in 1988, Silvers has been the primary catalyst for First International’s rise to one of the world’s leading Ex-Im Bank, SBA and USDA lenders.

He explains that the new law will have a huge impact on how e-business is done. For instance, most people think electronic signatures are important for closing documents only. What about the transmission of signed credit applications and financial statements, which are required of companies before loans are made? It’s not unusual to draw new prospects to online corporate lending products via the web, and then wait for days if not weeks to get signed financials which have legal standing. This will soon be possible. This is just a small example of how First International Bank will leverage its products internationally through e-business.

First International Bank operates through 15 offices in the United States and has representatives in 14 international markets. Its loan portfolio at the end of 1999 was $1.1 billion. After nearly 13 years at the helm, Brett Silvers believes the Internet will demolish many of the marketing barriers, which previously impacted small financial institutions and kept them out of the global economy. "We know our customers and their needs backwards and forwards. These needs are practically the same worldwide. The larger banks often won’t make credit products available in the relatively small size we specialize in. And, if we have been growing and profitable in the "stagecoach" days, just think what we are about to do in the Internet age," concludes Silvers.