Microsoft Adds Centura to Its Affiliates in Home Banking

Centura Banks Inc. has joined Microsoft Corp.'s bank partnership program, a sign that the software monolith is as eager as ever to expand its version of banking via personal computer.

The alliance program had seemed to be on hold since Microsoft announced its ill-fated takeover bid for Intuit Inc. last October. Intuit's Quicken financial software would have displaced Microsoft's competing Money product as the merged company's focus for banking and related transactions.

North Carolina-based Centura is the fifth institution to ally with Microsoft Money, and the first since the $2 billion Intuit acquisition was launched. The deal was terminated in May in the face of U.S. Justice Department antitrust objections.

At $4.8 billion of assets, Centura becomes the smallest of the Microsoft partners offering PC-based home banking services. The Money software enables access to bank account information, bill payments, and transfers of funds between accounts.

Centura, which has been more active in developing alternative delivery systems than many banks its size, plans to make the PC services available this fall, when Microsoft is slated to unveil an updated version of Money.

Bank officials have yet to decide how much, if anything, they will charge for the software or the associated banking services, according to Frank Pattillo, Centura's chief financial officer.

The signing of Centura suggests Microsoft's readiness to market Money more aggressively through the banking industry. When it began pursuing Intuit, with the aim of adding the market-leading Quicken to its arsenal, Microsoft had agreed to sell Money to Novell Inc. to satisfy the antitrust authorities - a provision that has since been rescinded.

U.S. Bancorp, Michigan National Corp., and First Chicago Corp. were the first banks to announce that they were working with Microsoft to help develop a banking-with-Money service in late 1993. U.S. Bancorp in Oregon was the first to launch the program early last year, and the others followed soon after.

Chase Manhattan Corp. joined the Microsoft group last October, within days of the Intuit merger agreement.

Until Centura made its move, banking-related news on the Money front had been sparse. But Microsoft officials said that did not mean they had ceased making progress.

For the past 10 months, the company has been developing the software, said Matt Cone, a Money product manager. The fruits of that effort will be apparent, he said, in the fourth release of the personal finance software, dubbed Money for Windows 95. In competition with Quicken, it has been designed to lure the consumer who has not traditionally used financial software and will focus more on the on-line banking component.

The new Money also will allow for banks to project their brand names more prominently in the on-line service. This, combined with the collapse of the Intuit deal, will make banks much more amenable to partnering with Microsoft, Mr. Cone believes.

"Now that the landscape is a lot clearer, financial institutions are more receptive," he said. "And the uncertainty around (Money) has been removed."

He said several banks would be signing onto the Money program in the coming months.

Gary Arlen, president of Arlen Communications Inc., a Bethesda, Md., consulting firm, said Microsoft has been putting a "hard sell" on banks lately - especially larger, high-profile institutions.

In addition to enlisting users for Money, he suggested the Redmond, Wash., software giant is looking to recruit banks as "content providers" for the forthcoming Microsoft Network, an interactive service expected to compete with the likes of America Online and Prodigy. But Microsoft is not focusing solely on large institutions. Centura is a case in point.

Aside from PC-based banking, the Rocky Mount, N.C.-based bank last summer launched a telephone banking platform called "Centura Highway." The system cost $1.5 million to build and receives 8,000 to 12,000 calls per day. Centura is also testing the use of screen phones, and its delivery strategy includes an off-line debit card known as Pocket Check.

The emphasis on remote banking comes on the heels of numerous acquisitions, consolidation, and streamlining, during which 23 Centura branches closed but 43 new ones were acquired.

Mr. Pattillo, who heads the direct banking initiative, said the bank used focus-group interviews in the Raleigh area to determine customers' readiness for PC banking. Much to his surprise, he found that 10% of the area's households had already used some type of personal financial software.

Centura will turn again to focus groups to help determine a pricing strategy for the Money service, the banker said.

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