Within six weeks of Integrion's announcement that it was turning over its Internet banking system from the service bureau to banks to run in-house, two of the utility's six clients have disclosed plans to switch to a new system.

One of them, Bank One Corp., was Integrion's first and largest customer, accounting late last year for half its end users. The Chicago bank has agreed to move by year's end to the Voyager system from Corillian Corp., lately the leading light in Internet banking. Bank One will use Beaverton, OR-based Corillian for www.bankone.com, its original Web site, but not for its WingspanBank.com subsidiary.

Analysts agree that Bank One is one of the nation's five biggest providers of Internet banking, with some placing it third (behind Wells Fargo & Co. and Bank of America Corp., respectively) in number of online customers.

PNC Bank Corp., the other Integrion customer that has voiced plans to drop Integrion's IFS system, is not quite in the same league. No experts count the Pittsburgh-based super-regional among the top 10 providers of Internet banking. PNC has made the unlikely choice of Siebel Systems Inc. for retail Internet banking-unlikely because the San Mateo, CA, vendor's origins and reputation are in customer relationship management, not Internet banking.

However, Anuj Dhanda, CIO of PNC's retail bank, notes that Siebel has expanded into transactional electronic banking software and emphasizes that PNC wanted a good multi-channel provider, not an Internet banking specialist per se.

Equally intriguing, PNC chose S1 Corp. to provide Internet banking software for its small business customers, but not, obviously, for its regular retail customers. (Both regular consumers and small business customers are within Dhanda's purview.

Martin Evancoe, senior vice president and head of PNC's online banking unit, confirms that PNC chose Edify Corp. software because the small business software S1 now offers was acquired as part of S1's May 1999 purchase of Santa Clara, CA-based Edify Corp. (along with Belgian corporate banking provider FICS Group). Atlanta-based S1 has been on a buying spree as it angles to become the premier provider of Internet banking software. (The firm denies a rumor that it spent $1.2 million on a "coming out" party at the Retail Delivery Show in Miami last December.)

In small business banking, S1 "picked the best," Evancoe says, referring to Edify. Asked if S1 is better at buying software than at developing it, or what other reasons might lay behind PNC's decision not to use S1 for consumer e-banking, Evancoe declines to respond.

S1 told this reporter last August that it was on the brink of signing several Integrion member banks, including some that were already using the IFS platform. The two original defectors from the consortium, KeyCorp. and Royal Bank of Canada, left to use S1 in spring of last year, when Integrion was restructured. At that point, six of the remaining 13 Integrion members had begun using IFS, but no additional banks would implement the software. The major user behind Bank One was Bank of America. Others were Washington Mutual Savings Bank, Wachovia Corp., Michigan National Bank and ABN Amro Corp.

PNC's Dhanda suggests that PNC plans to make Siebel software the bank standard, but that in the interim it needs something to offer small business clients, an important segment to the bank. PNC has 180,000 small business customers and 3 million retail customers. It could take as long as two years to complete the Siebel implementation, he says, adding that the process will involve an infrastructure upgrade expected to cost in excess of $30 million.

Bank One picked Edify, which also provides retail banking and call center software, for last summer's launch of WingspanBank.com. Bank One did

not return calls inquiring into its planned use of Corillian.

It's notable that a bank as big as Bank One would use a Windows NT-based system such as Corillian's for something as critical as Internet banking. Corillian's stellar results in scalability have greatly helped the vendor, notes Matt Cone, the company's chief marketing officer. The tests, conducted last year in conjunction with Hewlett-Packard Co., found that Corillian could support more than 3.5 million end-users, far exceeding the demands of any Internet banking provider today. That research was partly commissioned by a prospective bank customer, but Cone says it was not Bank One.

Corillian also got a major boost from a recent study by Celent Communications in which the Cambridge, MA, firm rated it as the best provider of Internet banking to large banks. "We have 35 banks under contract, 16 of which are live," says Cone, adding that Corillian's first client went live two-and-a-half years ago.

In contrast to Bank One, PNC is taking software that normally runs on NT and having it run for the first time on IBM Corp. equipment. "With Siebel being in the CRM space, having millions of transactions flow through it wasn't its core strength. We needed industrial strength reliability, and IBM is best-in-class in operations infrastructure," Dhanda says.

That said, he doesn't agree that PNC is taking a risk on a vendor not known for Internet banking. PNC has worked with Siebel in its private banking area, and Dhanda dubs the firm "best-in-class in CRM." Siebel's role will be to support PNC's main goal of offering personalized, consistent customer service across all banking channels, while extending the vendor's proven customer management capabilities to the Internet, Dhanda says. He adds that he believes PNC will be the first bank to use Siebel across all channels. Siebel technology will handle all online transactions, except for bill presentment and bill payment, which will be handled by CheckFree Corp.

PNC has had a lot of success in mining customer information and putting it to good use, Dhanda says, citing the Choice Banking program the bank ran between late 1998 and August 1999 as an example. After analyzing its retail customers' business with PNC, the bank called 1.8 million customers, including all checking accountholders, to suggest how their accounts might be restructured for the better. Emphatic that the program's goal was not solely to make customers more profitable, Dhanda says the campaign resulted in the bank growing its deposits while improving on its efficiency ratio, customer satisfaction and retention.

About 20% of PNC's checking customers bank online, Evancoe notes. Dhanda clarifies that if you count only "active" customers-meaning regular monthly users-then about 11% of PNC customers bank online.

Evancoe adds that about 160,000 of PNC's 250,000 online customers are on IFS. The others use Web-based personal financial management packages, such as Quicken.

Regarding the Integrion IFS system, Evancoe comments, "Everyone has to be off by the end of the year." He adds, however, that Integrion is leaving the door open for users to continue on the system.

That offer by the Philadelphia-based consortium, which is partly owned by IBM and Visa USA, sounded like lip service in Integrion's March 1 announcement that the administrative facility was winding down. Though the number of end users on IFS has been growing fast, the six IFS banks combined last year surpassed the one million user mark only some months after Wells Fargo did so on its own.

Dhanda says that PNC has no qualms about running Internet banking in-house despite initially seeking to outsource it because the bank's own data center exceeds industry performance standards. Why then did PNC ever look to an outside provider of Internet banking, such as Integrion? Dubbing Integrion "a good experiment," Dhanda says, "I wasn't involved then, but I think people thought the Web was new and that pooling resources would increase speed to market. The notion that you get more speed with a consortium has moved away, and it seems that the majority of users are clearly moving off of IFS."

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