International Business Machines Corp. and 15 major banks unveiled their long-awaited home banking network Monday, touting it as a bank-friendly alternative to existing systems.
The Integrion Financial Network will be co-owned by IBM and a host of the country's biggest banks, including BankAmerica Corp., NationsBank Corp., and First Chicago NBD Corp.
The stature of the partners is expected to give the consortium considerably greater clout than similar organizations formed in the past year.
IBM and the participating banks - which will share the costs and revenues equally - insist that Integrion will work with banks, not against them.
"IBM is not in the business of disintermediating our customers," said Louis V. Gerstner Jr., chairman and chief executive of IBM. "We are not in the position of putting our brand between customers and their banks. We are an enabler and a provider."
Integrion plans to offer banks a cooperative processing infrastructure for home banking. In that way, it is similar to the regional automated teller machine networks that evolved to support that technology.
But in the home banking market, the venture is entering an already crowded field that includes such players as Intuit Services Corp., Visa Interactive, and Checkfree Corp.
By teaming with IBM, the banks aim to retain control of customer relationships as they strengthen their commitments to home banking. Integrion's partners represent more than half the retail banking population in the United States and Canada.
"This is all about banks retaking control of the payment system and sharing a common infrastructure that will allow them to support their brand," said Robert B. Hedges Jr., senior vice president at Fleet Financial Group, an Integrion partner.
James Dixon, chief information officer at NationsBank, added: "It is important to own the bill payment engine."
Banks have expressed concern about the momentum that software companies like Microsoft Corp. and Intuit Inc. have generated from their personal financial software products and services, even as they have supported those products, which are popular among consumers.
About 1.3 million people use home banking options today, according to Diogo Teixeira, president of the Tower Group, Wellesley, Mass.
Integrion "has a good chance because of the weight of the banks," Mr. Teixeira said.
By banding together, member banks hope to introduce economies of scale and generate fresh enthusiasm for home banking.
"It would be very difficult for any one organization or institution to do it alone," said Michael King, director of alternative banking at Michigan National Corp., another Integrion partner.
Integrion will publish an open connectivity standard called "Gold," which software makers may use to make their products compatible with the system.
Ultimately, banks that join Integrion will have the option of offering customers the ability to connect to their accounts through the Internet or a private network run by IBM.
Banc One Corp. and NationsBank will be the first to pilot the system, early next year.
Officials at Meca Software and Home Financial Network, two makers of home banking software, said they plan to customize their products to Integrion's standard. And Microsoft may do so as well.
Integrion is a sign that "these banks are moving forward," said Matthew Cone, a Microsoft home banking product manager.
Michael McChesney, chief executive of Five Paces Inc. and a director of the Security First Network Bank, said he welcomed Integrion to the market although it would compete with his company. He said he found IBM "very open and willing to work with third parties."
The official announcement of Integrion has been awaited for months since Hugh L. McColl Jr. the chairman of NationsBank, revealed news of the consortium in an interview with The Washington Post.
Sources said the company was set to be launched in 1998 but was accelerated for fear other providers would usurp the initiative. The rush meant that at least three banks decided not to take ownership positions.
"They only got their document for due diligence out to us on Tuesday," said Robert P. Shay of BankBoston. "Others may sign it on such short notice, but we certainly won't."
Integrion officials said they were still working to sign up new banks - as customers as well as owners - and conducting a search for a chief executive. Both owner and customer banks will be charged the same rates for services.
