For all the hype surrounding the advent of financial services in cyberspace, banks are moving cautiously onto the Internet with only the most basic offerings and tentative plans for more extensive measures.

While many bankers chat up ambitious plans for account access and information via a slew of electronic means - particularly the Internet - few are openly embracing on-line options as boldly as it would appear.

According to the American Banker/Tower Group 1995 Information Technology in Banking Survey, only one-tenth of large banks are currently working to allow customer access through the Internet. The forecast for on-line financial services improves gradually over the next couple of years; 16% of the banks responding said they budgeted for such projects next year, and 26% said they plan to pursue Internet initiatives in 1997.

But, surprisingly, a full 48% of the banks admitted they currently have no plans to offer Internet access.

Why such disparity between the hoopla and the here and now?

Bankers cite as the main constraint the lack of security of the vast interconnected networks that comprise the Internet. Although both major bank card associations and several software companies are creating various data security protocols to ensure against fraud or unauthorized snooping, the staid banking industry is hesitant to commit hard dollars before the standards are in place.

"A lot of banks right now are just kicking tires," said one respondent, Richard Sellers, who is president of Huntington Bancshares' processing unit, Huntington Services Co.

The Columbus, Ohio-based banking company is investing in an Internet bank venture - Security First Network Bank - created by Cardinal Bancshares, a Kentucky community bank. But most banks with any Internet aspirations are dipping only the most tentative toe in the water - posting a site on the Internet's World Wide Web annex.

Customers can access a bank's "home page," as these sites are called, and find general information about the bank, its loan rates, or, in some cases, print out account applications. More than 70 banks have set up such sites.

Mr. Sellers said that most banks are using their home pages as a barometer to judge how much interest other on-line services would receive. But high levels of inquiry could be deceiving, he said, as much of that activity is simply "banks checking each other out."

Matt Cone, a product manager for Microsoft Corp., sees the level of banking interest as "very positive." He estimates that the percentage of banks that were eying the Internet just six months ago was closer to 15%.

And bankers' fears about security and customer interest could also be tempered by the greater worry that dragging their feet could cause them to fall behind the competition.

Indeed, many industry insiders say that the greatest force behind the recent commotion was the "Microsoft scare" of this past year. Many say banks shuddered, then leaped into action when Microsoft Corp. tried to buy its most formidable adversary in the personal finance software market, Intuit Inc., as a foundation for its own electronic financial services enterprise.

While that proposed deal is long dead, concern surrounding the future of financial services is still very much alive.

"This bank is very much concerned about being left behind," said Eugene M. Flowers, vice president and manager of systems and methods for Imperial Bancorp, Inglewood, Calif., another of the 23 bankers who responded to the survey.

Imperial has posted a home page and is investigating other on-line opportunities. But Mr. Flowers pointed up the all-important security issue, saying that his bank"needs to find out more about firewalls (to protect the internal operating systems)" as well as encrypting information as it is communicated between different points in any given transaction.

But banks, while skittish about the openness and complexity of the Internet, still remain fairly focused on the personal computer as their medium of choice.

According to survey findings, screen phone delivery seems to be moving at a much slower crawl, if it is not stalled all together.

Only 6% of the survey participants are currently working with screen phones, while only 11% have budgeted for such development next year and still only 17% expect to engage in such projects by 1997. A whopping two- thirds of the surveyed banks - 66% - do not expect to use screen phones at all.

Mr. Sellers said that a high average price and technical delays have slowed consumer acceptance and dulled banks' interest.

He speaks from experience. Huntington abandoned its own screen phone project with AT&T more than two years ago.

While the price has been dropping, Mr. Sellers claims the devices still lack the broad range of functionality needed to lure consumers.

"Banks nowadays are focused more on PC-based technologies ... they bring a higher class of customer," Mr. Flowers said, in reference to the impressive demographics of PC owners.

"Screen phones are hitting a dead end," said David Medeiros, a consultant with the Wellesley, Mass.-based Tower Group.

Mr. Medeiros pointed to Citicorp's apparent pullback from its screen phone initiative, reported in the American Banker in July, as a significant sign of turning tide in remote banking.

Citicorp, the largest and the most staunch supporter of screen phones as a vehicle for banking services, pulled the plug on its most ambitious project and seems lately to be turning its attentions to PC-based programs. This may well be indicative of the industry as a whole.

All in all, banks may feel once-bitten, twice-shy about the remote banking revolution, given that many big banks got burned when they made bets on such mechanisms a decade ago. Bankers and consultants alike agree that it will take some time for financial institutions to feel a greater comfort level, and that they will take the utmost precautions to protect their information and themselves.

"It's all being done in a piecemeal fashion," Mr. Flowers said. "They're looking at this as a resurrection of the '80s."

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