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Bigger, traditional firms gain the upper hand in the battle for e-finance supremacy.

To view the complete ranking results please go to the ranking section of this site and scroll down to the OnLine Finance 30.

The race doesn't always go to the swift. Sometimes it helps to be big and even a little slow. Not too long ago Old Economy warhorses were written off as too plodding to fend off more nimble competitors from the New Economy. In the financial services industry, branch offices, long-established client relationships, double-digit profit margins , even coats and ties , became liabilities. More valued were rapid revenue growth, a surging stock price, incredible technology and a Net-only business plan. Then Web stocks crashed, and the world turned again. Suddenly, size and physical presence were vital once more. Remarkably, the financial companies prospering in global e-commerce today bear names like Citigroup, Deutsche Bank, Allianz, Commerzbank, HSBC Holdings and BNP Paribas.

While the Nasdaq's tumble last spring forced many new e-businesses to scale back their ambitions, larger, traditional institutions, whose share prices were mostly unaffected, were rediscovering the advantages of bulk. Success in e-commerce in 2001 comes from "leveraging the brand, customer base and physical plant," maintains Citigroup vice chairman and Internet chief Deryck Maughan. Bo Harald, who designed Finnish bank Nordea's Internet strategy, points out that he wouldn't be getting 5.6 million customer log-ons a month without "people in branches to do the gentle push to get customers online."

To be sure, it wasn't just size or equity-market trends that helped the bigger firms. Commercial and investment banks borrowed from their competitors. They set up new e-business units and appointed Internet czars to tackle challenges that were as much cultural as technological. Dress codes went Silicon Valley casual, and dot-com addresses became as important to corporate image as oak paneling. They also continued to lift their investments in new technology. Executives no longer question the importance of the Internet , it's a part of every business plan.

Does this mean that every aspiring Internet financial services purveyor needs a bricks-and-mortar branch network? Hardly. The online finance industry can, and does, accommodate multiple business models. But it's also true that in the year since Institutional Investor published its first Online Finance 30, the ranking of those setting the pace in e-banking, e-brokerage and other aspects of e-finance has undergone a major shift. In today's more restrained , and realistic , climate, the more established institutions have gained an edge.

"Size matters," says Ernst & Young senior industry analyst Beth Morrow. "The largest institutions leverage so much off technology that they must keep spending through any cyclical event. And the largest banks and Wall Street players won't be turning back."

The market's bias toward bigness is reflected in this year's list. It introduces 16 faces and 14 institutions not represented last year; most are either major banks or brokerage firms, or owned by them. At the very top is Herbert Walter, CEO of Deutsche Bank 24, the largest "bricks-and-clicks" retail bank in Europe.

But younger, entrepreneurial firms are also well represented. Among them: the U.K.'s Egg online bank, the fixed-income platform and foreign exchange software leader Cognotec. In Asia, where old-line financial firms continue to stumble, most of this year's Online 30 come from start-ups. Clearly, online finance remains an industry that thrives on creativity and ferment. And, as many entrepreneurs learned last year, the world can change in a heartbeat.

The following profiles were compiled under the direction of Global Technology and Banking Editor Jeffrey Kutler and written by Kutler, Hong Kong Bureau Chief Kevin Hamlin, Senior Editor Andrew Capon, Staff Writers Justin Dini and David Lanchner and Contributing Editors Jane Adams, Jeanne Burke, John Cooney, Hugh Fraser, Sara Kandler, Don Kirk, Sharon Reier, Charles Smith and John Wagley.

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