Banks are in an ideal position to deliver consolidated financial services over the Internet, but to be fully effective they must collaborate with other service providers, Banc One Corp.'s top retail executive said.

Kenneth T. Stevens, chairman and chief executive officer of Bank One Retail Group, was speaking last week at a conference in San Francisco, where he vigorously argued against predictions that discount brokers would have more power in on-line markets.

"Banks are still the first choice for consolidating financial services and are central to the social and financial fabric of the country," Mr. Stevens told the meeting sponsored by Jupiter Communications of New York. "People trust banks-if they are convinced you are working on their behalf."

According to a Forrester Research survey, he said, 64% of respondents want their bank to deliver all of their financial services on-line.

Banks' votes were more than five times those of brokerages, technology companies, or "portal" sites that act as gateways to a broad range of products and information.

Mr. Stevens went against the grain of other presentations at the conference. Jupiter, for example, projected that discount brokers would control more than 50% of on-line personal financial activity by 2002. Other presenters said Internet-only banks, technology companies, and portal sites would be likely on-line winners.

"I can understand some healthy skepticism," Mr. Stevens said. "Until regulatory restrictions were loosened, the biggest change in 20th-century banking was putting air conditioning in the lobbies."

But he said banks with vision, brand power, personalized on-line relationships, and the all-important ability to collaborate with competitors could come out on top.

Banc One offers mortgages, term life insurance, and securities trading through partnerships with the likes of E-Trade Group, the insurance broker David T. Philips, Citicorp, BankAmerica Corp., HomeSide, and GMAC Mortgage Corp.

"We do not have the institutional arrogance to say that we have the best products in every category, because we don't," Mr. Stevens said.

"The bank needs to say, 'We value you, we want to meet your needs, even if it is not Banc One's product.'"

Collaboration should extend to the sharing of customers' financial information, he added.

"I couldn't look a customer straight in the face and say that I have their best interests at heart but won't allow them to see their information from Banc One on Fidelity's Web site," Mr. Stevens said.

He characterized as "alarming" a recent study by Ernst & Young that found only 1% of banker respondents viewed the Internet as a means to attract new customers. More bankers viewed it as a defensive than an offensive tool.

Mr. Stevens confessed his embarrassment that Banc One did not begin piloting its transactional Web site through the Integrion Financial Network until 1997. The bank expects to have 200,000 users by the end of the year.

"Traditionally, banks had a lot more information than consumers and they made a lot of money on the fact that consumers did not have that information," he said. "I continue to think that we will think of new and better ways to serve them. And if we don't, we deserve to lose their business."

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