WHITE SULPHUR SPRINGS, W.Va. -- The blurring of the lines among banks, insurers and other financial services providers will accelerate in coming years, a bank executive says.

Regulatory reforms, such as financial services modernization legislation in Congress, are one driver of this change, he says.

An even more important factor, however, will be technological innovation, provided that companies avoid substituting human contact and relationships with computers, he contends.

The changes the financial services industry has experienced to date will pale in comparison with what will occur in coming years, predicted Edward E. Crutchfield, chairman and chief executive officer of First Union Corp. in Charlotte, N.C. Mr. Crutchfield addressed attendees of the 85th annual Insurance Leadership Forum, sponsored by the Council of Insurance Agents & Brokers and the Council of Insurance Company Executives and held at The Greenbrier resort in White Sulphur Springs, W.Va.

"The explosion of information technology has broken down the borders of the past," he said.

With computer technology, a company's location becomes less relevant as it is able to access information and provide services worldwide. Money, products and services are easily traded and obtained via computers, he said

In addition, information technology increasingly will enable companies to learn more about their customers than ever before, Mr. Crutchfield said.

The bank executive predicted that in two to five years, a handful of financial services firms will control about 60% to 70% of all business.

These companies will offer nearly all relevant financial services, he said, ranging from banking and insurance services to mutual funds and stock brokerage services.

First Union has become one of the largest bank providers of annuities, Mr. Crutchfield said. Annuities have been a far more profitable line of insurance for the bank than small commercial lines products, he noted.

"We haven't broken that code," he said, referring to success in commercial insurance sales. One reason, he said, is that insurance is still a personal, face-to-face business and insurance agents and brokers have better relationships with their customers.

But Mr. Crutchfield warned his audience not to rest on those laurels in light of financial services competition.

"There are so many companies competing for our business that it's unrealistic to think it won't happen to you," he said.

A member of the audience asked Mr. Crutchfield why more banks don't seek to partner with insurance agents, rather than attempting to replace them in a market where they don't perform as well.

"Well, there are dumb bankers, just like everywhere else," quipped Mr. Crutchfield.