Unlike most of its peers, KeyCorp has never offered a home banking program for the personal computer - and still doesn't.
The Cleveland-based superregional's first remote service will debut, as a pilot test, in November. A full market launch is due in late 1997, and KeyCorp executives are promising new wrinkles.
Known for their retail and branding innovations, KeyCorp strategists say they have deliberately held back on banking by computer and the Internet, to make sure they come up with something consumers will crave.
"I've been very reluctant just to throw a home banking capability out there that emulates what other people were doing," said KeyCorp's Allen J. Gula Jr. Such programs "appear to be failures," he said.
"You'd get a few customers who were interested, but you weren't making any money, and it wasn't adding any value to the experience," said Mr. Gula, chairman and chief executive officer of Key Services Corp., KeyCorp's technology division. "Customers ultimately went into the branches and used ATMs anyway."
KeyCorp will attempt a novel and "holistic" approach: emphasizing not just account inquiries and bill payments, but what the bank refers to in its general strategy as "managing life experiences."
For instance, a consumer who submits an on-line application for a home equity loan could be linked to a variety of home improvement products and contractors. Up would pop a list, say, of stores that sell paint or of carpenters who are bank customers and who also offer a 10% discount through KeyCorp.
As the product is enhanced, bank officials say, customers could use it in more sophisticated ways, such as for planning vacations. Internet connections could link the consumer to Web sites with airline or travel agent information. Someone hoping to go to Yellowstone Park in April might find information about the climate and perhaps a link to apparel vendors who could supply the appropriate clothing.
"With all our remote delivery, we're taking care of our customers' everyday events as well as their life events, things that have a major financial or lifestyle impact," said Patrick J. Swanick, group president for electronic commerce.
"We would like to have been out there a little sooner," Mr. Swanick confessed, but he does not see the tardiness as a problem.
"The marketplace is moving so quickly, and we are applying this unique strategy of life events," Mr. Swanick said.
The products will be called Key Right at Home (for consumers) and Key Right at Work (for small businesses).
Consumer testing will begin in November, with a pared-down version of what will become the "life event" software. Bank officials plan to refine the product for general release late next year and to continue to add functionality after that.
"My view is that our role will be much broader than just banking - it will be electronic commerce," Mr. Gula said. "You can do bill payments and things like that by picking up the telephone now."
Naturally, the bank is integrating these products with its other remote offerings. The look and feel of the home and small-business systems will mimic other channels, like kiosks, automated teller machines, and the KeyCorp Web site.
"I think acceptance is going to be pretty high" for the PC banking products, Mr. Gula said. "We're putting together a pricing structure that will be geared toward more usage of that product than for brick and mortar."
The pricing details are still up in the air. Mr. Gula said it costs $3 when a customer does a transaction in a branch and 50 cents at an ATM. Though he did not know how much a computer-based transaction would cost, he assumes it would be far less than either of those modes.
Internet banking is also on its way, perhaps as early as the first quarter of 1997, Mr. Swanick said.
"As recently as 60 days ago, we weren't convinced that an Internet- branch transactional presence was necessary," he said.
The bank posted a home page July 1. The flood of E-mail from customers and potential customers who said they would like to use the Internet channel defused the KeyCorp bankers' skepticism.
"We've had thousands of Web page hits - about 80,000 or 90,000 a week," Mr. Swanick said. "Clearly it's a cost-effective channel, and our concerns about security are being answered more and more."
Another new product - Keymobile - is a cellular telephone that has computer-like knowledge and a beeper. It will be tested this winter by about 50 private banking customers.
"If you're an entrepreneur on the golf course and you just had a major swing in your portfolio, you'll be alerted and connected to your KeyCorp adviser," Mr. Gula explained.
The array of pilot programs fall under KeyCorp's First Choice 2000 plan, which aims to reorganize the bank around specific customer segments.
As it pushes the technology frontier, the bank is redesigning its delivery systems. At the Rock and Roll Hall of Fame in Cleveland, jukebox- style ATMs dispense concert tickets and play music. At Key Arena in Seattle, ATM users can play video games.
More broadly, branches are being customized to the population they serve, whether college students or the elderly.
"We're going to consolidate and get rid of some of our branches and redesign them toward the segment that uses them," Mr. Gula said. "If the demographics of a particular branch tell us that it's mostly small-business customers, we're going to gear that branch toward them - different hours, different types of automation.
"We even put conference rooms in our branches now, so that we have areas available to our customers.
In-branch seminars are also a staple," Mr. Gula added. A branch catering to small businesses might bring in a team from AT&T to demonstrate telephone systems.
"It's like gas stations," Mr. Gula said. "It wasn't too long ago that there was a full-service station on every corner. Now there are fewer of them, and they're largely automated and have mini-marts.
"I think branches are going to transition that way."
