One senior Bank of Boston Corp. executive called it letting "a nonbank fox into the banking henhouse."

But the five banks that own Meca Software Inc., maker of the Managing Your Money home banking and personal financial software, said their decision to let New England Life Insurance Co. join the fold makes perfect sense.

"We've always been interested in bringing in businesses that cover different parts of the financial services industry and benefiting from the dynamic nature of that process," said Harvey Radin, a BankAmerica Corp. spokesman.

BankAmerica and NationsBank Corp. purchased Fairfield, Conn.-based Meca from H&R Block for $35 million in early 1995. The move was viewed as an attempt to stave off home banking competition from nonbanks like Intuit Inc. and Microsoft Corp.

Later last year, three other banks joined the consortium of Meca owners: First Bank System Inc., Fleet Financial Group Inc., and Royal Bank of Canada.

And this month, New England Life, a subsidiary of Metropolitan Life Insurance Co., came aboard, paying $10 million to take its place alongside the banks.

Observers say the deal is a signal of things to come: As banks seek ways to offer nontraditional products and insurance companies seek ways to behave more like banks, the walls of competition and delineation have begun to crumble.

Moreover, both banks and nonbanks are scrambling to serve consumers electronically.

"The buzzword of the day is 'coopetition,'" said Daniel M. Schley, the former Meca president who is now chief executive of Home Financial Network.

Mr. Schley said he views insurance as "the next battleground in the on- line delivery of financial services."

"What you're seeing is many different alignments, many different deals being done, with people saying, 'I know you're my competitor, but let's ally for a while and check the lay of the land,'" he said.

"It reminds me of the Allies in World War II. You couldn't say the United States and the Soviet Union were the best of friends, but they were united in the common cause."

William T. Gregor, a senior vice president at Gemini Consulting in Cambridge, Mass., said financial institutions' common goals - getting on- line and proffering as many products as possible - will make for "interesting bedfellows" in months to come.

For banks, he said, "There's always the fear of losing customers, but you can't afford to try and block those kinds of things.

"If you were one of those five banks, and you were faced with letting (New England Life CEO) Bob Shafto join your club versus keeping him out and next week seeing that he had made a deal with Quicken, you'd say, 'Maybe we shouldn't have kept him out,'" he added.

For Meca, the deal is good news. The infusion of capital will jump-start research and development efforts. And New England Life's 37 million customers will boost Meca's owners to a combined 80 million in household relationships.

Paul D. Harrison, chief executive of Meca, called the arrangement "a precedent-setter."

"I think it plays very clearly to the message that was sent when NationsBank and BofA originally acquired Meca: That the technology companies are a threat, not the other financial services providers," he said.

"Clearly, there are synergies between insurance companies and banks that can be worked on," Mr. Harrison added. "There are no guarantees that this will happen, but this does create the ability for the banks and other owners to talk together about other ways they can improve their businesses."

New England Life plans to offer a customized version of Meca's Managing Your Money by April, said Peter N. Harrington, a company spokesman.

"We see it as an opportunity to attract customers," he said. "As best we know, we are the first insurance company to move in this direction."

Mr. Harrington said New England Life is eager to perform more banklike functions - those that regulatory constrictions permit - and that the company's goals are in harmony with its bank partners.

"I think we share a similar concern with banks that the focal point of customer contact should be financial institutions and not the technology companies," he said.

Gary Meshell, director of the financial services industry consulting practice at Price Waterhouse, said he has seen this convergence of interests reflected in his practice. "We've seen a lot of discussions start to begin between banks and insurance companies," he said.

"Insurance is an area we know that banks are desperate to get into," he said. "Insurance companies have the product, but lack the distribution channel. They want access to the Internet, and they want access to the banks' customers."

Ushering New England Life into the Meca consortium was "a natural evolution," said David Renard, an electronic commerce analyst at the Gartner Group of Stamford, Conn.

"The second they started letting a Canadian bank into their fold meant that they were expanding out of traditional banking," he said.

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