asserts Robert P. Shay Jr. "Within the next few months, we're going to be rolling out something nobody else has done." That would put Bank of Boston Corp. in a league dominated so far by California banks. As director of self-service banking at Bank of Boston, Mr. Shay's mission is not only to orchestrate the merger of Bank of Boston and BayBanks Inc.'s home banking products, but to create a new generation of blended electronic offering. Mr. Shay and other eastern bankers said security concerns tempered their enthusiasm for the Internet. But they have been intrigued by the success of BankAmerica Corp. and Wells Fargo & Co., which were spurred onto the new medium because of their proximity to Silicon Valley. In early 1997, Bank of Boston intends to use the Internet to deliver bank statements and check images (provided, of course, customers still write paper checks). Mr. Shay said he knows of no other bank that offers that capability. "That's our initial step, and it really is a first step," Mr. Shay said. "We see the home banking functionality coming together on the Internet." Among the new frontiers in banking technology are interactive television. A Boston cable company, Continental Cablevision, is working on a cable modem pilot. Once it is under way, Bank of Boston intends to use it for home banking. On another front, the bank's extensive automated teller machine network - BayBanks was the regional ATM leader - is getting a face-lift. Conventional machines are being replaced by ones with touch-screens that can display check and statement images. The bank will also embark on a smart card project with Warner Brothers and other partners. Details are scant, but Mr. Shay said the trial "will put an entirely new spin on the marriage between banking and entertainment and other sorts of major retail segments." Once a promoter of screen telephones, Bank of Boston has lowered expectations for the devices. But standard telephone banking is going great guns, with continued growth expected. "The thing that always strikes me as I look over my monthly sales results is, we have lines of business that didn't exist five years ago that are making us millions," Mr. Shay said. "Hard charges from telephone banking are making a million dollars." With the combination of remote banking offerings, "We think we're going to reach the cashless society sooner than most," he said. Mr. Shay, 49, grew up with such ideas instilled by his father, who taught banking in New York at Columbia University. "I remember vividly sitting at the dinner table in 1963, when I was a junior in high school," Mr. Shay said. "He slapped a BankAmericard down on the table and said, 'You know, some day there won't be cash, there will only be these.'" Before going into banking, Mr. Shay earned a doctorate in modern European history at Columbia, where he wrote a book about British rearmament in the 1930s. He then went to business school and worked for several consulting firms, developing specialties in banking and telecommunications. "One day I saw an ad in The Boston Globe that BayBanks wanted someone to manage their home banking," Mr. Shay recalled. "I came to BayBanks and interviewed with Lindsey Lawrence, and it was one of those instant karma-type things." Fourteen years later, Ms. Lawrence and Mr. Shay still work together - albeit for a bigger bank transformed by a merger. "We share a passion for electronic banking - and we both graduated from Oberlin College," said Ms. Lawrence, now a BankBoston executive vice president. "Working together for so long, we've both grown and developed synergistically," she added. "That's rare in a working relationship, and I think one is going to see less and less of it, especially in the banking world." Both Mr. Shay and Ms. Lawrence recalled with humor their earlier pratfalls in home banking. In 1982, "there was a big wave of excitement about the potential of using computers to do banking at home with 300 baud modems," Mr. Shay said. Personal computers were far more scarce than they are today, and 300-baud modems were painfully slow. Mr. Shay's demonstrations to senior management were "rather amusing," he said, because the technology was unreliable. "If there was a God, the modem actually worked," he said. "Then I'd be demonstrating the ease and convenience of doing this, and I'd have to talk and distract people so they wouldn't notice how slowly the next screen filled up. "All you needed was to experience that once to realize that things weren't ready. I was the product manager and the advocate for this, and yet I couldn't bring myself to do my own banking on it." Today, 143,000 customers are using Homelink, the direct dial-up home banking software BayBanks licensed from Citicorp. They sign up at the rate of 1,500 a week. Bank of Boston has 13,000 customers banking through Quicken and Money, the personal financial management products created by Intuit Inc. and Microsoft Corp. For now, the two home banking approaches are separate. By next summer, both will be available to all customers in what Mr. Shay calls "our next iteration of home banking." Bank of Boston is also working to merge the two banks' Web sites, which reflect their historically contrasting cultures. "Now we have this large, staid bank with its large, staid Web site, which has everything that a customer could want, merging with this nimble little bank (BayBanks) that gears itself to college students," said Ray Graber, the bank's Web master. "How do you put those together? It's going to be fun." Mr. Shay said Bank of Boston's conservatism and BayBanks' youthfulness "complement each other. The merger is a natural." Ms. Lawrence said the "sharp uptake" of home banking this year and the rapid adoption of other new services have been gratifying for her and Mr. Shay to watch. "We've been so quickly rewarded by the customers," she said. "We put stamps on the ATMs, and people just happily started buying stamps." She predicted Internet banking would take a while to catch on, but said the bank was content to let it grow slowly. "We're interested in things that 30% of the customer base uses or 70%, not 2%," she said. "That said, all the research we get back now shows a readiness and willingness for the Bank of Boston customer base for the services we offer. In general, our customer bases are going to come together reasonably well." From customers' perspectives, the two banks are still operating as distinct subsidiaries. Over the next year, as systems are integrated, a single retail presentation will take shape. "Managing this is a little like the circus act where the lady is riding two horses at once with one foot on the back of each horse," Mr. Shay said. "It's a neat trick, but I don't want to do it any longer than necessary."
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