Alltel Information Services Inc. announced an agreement this week with Five Paces Inc. to jointly promote Internet banking technology to financial institutions.
Under terms of the agreement, Alltel will manage a data processing service bureau for Five Paces, an Atlanta-based maker of banking software for users of the Internet's World Wide Web.
In addition, Alltel will market Internet-based outsourcing services to banks.
The deal also lets the Little Rock-based computer services company license Five Paces' Internet banking software, Virtual Financial Manager, to banks that want to manage their own Internet service.
The same software lies at the heart of Security First Network Bank, a unit of Cardinal Bancshares, Lexington, Ky., that operates entirely on the Internet. Five Paces' Internet banking system uses transaction security technology from an affiliated company, Secureware Inc. of Atlanta.
The Alltel-Five Paces alliance is intended to give both large and small banks the ability to quickly offer interactive banking services over the Web. Most of the current banking presence on the Web consists of static information and advertising.
"It seems like every bank in the country is scrambling to get something up on the Internet, but many aren't that well thought out and are just place holders," said Seamus McMahon, an analyst with First Manhattan Consulting Group. "Initially (the outsourcing option) should have some appeal if they keep their pricing reasonable. Actually, I'm somewhat surprised this hasn't happened sooner."
With the Five Paces alliance, Alltel is "committing to a viable way to let customers bank from home," said Collins A. Andrews, president of Alltel Information Services' financial services division.
"This is a partnership in which both companies are doing what they do best."
Michael McChesney, chief executive officer of Five Paces, said the arrangement provides "the financial software as well as the computer interface, customer service representatives, and technical support staff for banks that want to conduct business over the World Wide Web without allocating extensive financial and employee resources."
Mr. Andrews said Alltel will integrate Five Paces software with its own core banking software. Alltel also can adapt core banking software from other vendors for use in a service bureau environment.
Alltel said the outsourcing and software integration services are available immediately.
