M&I Data Services, a leading player in the bank systems outsourcing field, has formed a bevy of alliances - with Intuit Corp., Microsoft Corp., and others - to let its more than 600 financial institution clients offer a menu of home banking and bill payment services via personal computer.
Last week, the Milwaukee-based subsidiary of $13.3 billion-asset Marshall & Ilsley Corp. announced that it reached an agreement to offer home banking capabilities to its clients using the Microsoft Money personal finance program.
Officials added that similar alliances with Intuit Inc. and Five Paces Software Inc. are expected to be announced next month. Intuit markets Quicken, the leading financial software package for PCs, and Five Paces sells software for providing banking services over the Internet's World Wide Web.
The deals are significant in that M&I's bank clients are mainly community banks and midsize regional institutions, a segment of the industry that until now has not been well penetrated by either Microsoft or Intuit with their home banking programs.
Other big financial technology outsourcing firms have been moving into the home banking arena as well. Last year, Fiserv Inc., M&I's crosstown rival, agreed to offer PC banking using software from Columbus, Ohio-based Checkfree Corp. Earlier this year, Alltel Information Services Inc., Little Rock, formed a processing and marketing alliance with Atlanta-based Five Paces.
"When we started to think about offering home banking about a year ago, we had two choices in order to bring product to market: we could build it ourselves, or we could find strategic partners," said Alfred S. Dominick Jr., M&I Data's head of retail delivery products. "Working with someone who had expertise in these areas of PC banking, Internet banking, and bill payment made a lot more sense than us trying to reinvent the wheel."
The agreement with Microsoft will provide M&I Data's clients with a systems interface to Microsoft Money using the Redmond, Wash.-based software company's recently announced Open Financial Connectivity specification. The specification allows banks to connect to consumers' PCs using either a direct telephone connection or via the Internet. Bill payment processing will be handled through a unit of Travelers Express, although M&I will handle the customer support for that function, Mr. Dominick said.
He added that under the pact with Intuit, banks can link up with consumers via the Menlo Park, Calif.-based company's processing subsidiary, Intuit Services Corp.
"What we've done is quietly forged alliances with the key players in this business where we can provide value-added resources and support in an integrated fashion," Mr. Dominick said.
