Major Banks, IBM Launch Online Service
IBM and 15 banks that claim as customers more than half the households in North America on Monday launched a company that aims to set the standard for services such as online check writing and money transfers.
The new company, called Integrion Financial Network, will offer online services similar to those already available through software such as Intuit’s Quicken and Microsoft’s Money.
But IBM hopes the venture will attract new banks to the online world by giving even the smallest of them a network through which their customers can talk to them, and an industry standard by which they communicate. The new network will allow banks to brand their own online products.
Bank customers will be able to use it to check their balances, write checks, transfer funds and send e-mail to their banks. Eventually, they may be able to trade securities and get stock quotes, get access to their mutual funds and apply for loans.
Integrion represents banks’ latest effort at staying at the top of the banking services business, which has been encroached on in recent years by non-bank companies. Bankers were rankled when Microsoft Chairman Bill Gates in late 1994 declared their institutions were dinosaurs. Gates has since tried to dispel the notion that his company will try to steal banks’ customers.
In an interview, KeyCorp President and Chief Executive Robert Gillespie offered a hypothetical example of how a bank customer might use Integrion: Someone not familiar with KeyCorp--maybe a Bank of America customer on the West Coast--shops for a boat on the Internet and, after reviewing the specifications of several models online, decides on one.
At the bottom of the boat vendor’s Web site, a message flashes informing him that KeyCorp offers special boat-financing products. For more information, the boat buyer can contact KeyCorp through Integrion.
Integrion’s bank partners include big institutions such as Banc One, Bank of America, NationsBank and the Royal Bank of Canada.
Other banks in the venture are ABN AMRO, Barnett Bank, Comerica, First Bank Systems, First Chicago NBD, Fleet Financial Group, KeyCorp, Mellon Bank, Michigan National Bank, PNC Bank and Washington Mutual Services Bank.
But the services that Integrion develops will be open to all banks.
The banks will reach their customers via their own online home page, which will be accessible through the Internet’s World Wide Web and other online services, such as America Online, CompuServe and Prodigy.
IBM’s global data network, typically used by large companies to supplement their internal data networks, will also be an option to deliver services.
Banks will be able to decide whether their customers can integrate their financial programs, such as Quicken or Money, into the online services.
In some cases, the banking services will be available simply with Web browsing software.
Participating banks will make money by charging transaction fees for carrying out tasks online. IBM will make money by selling services and integrating various software programs and computer systems for Integrion.
