Looking to diversify its services and take advantage of the current home banking craze, Bisys Inc. has begun to offer electronic banking services to its customers.

The fast-growing, Houston-based outsourcing company has already signed on more than 20 banks for its home banking services, including funds transfer and bill payment. Bisys will start by offering these functions by phone, but officials said they plan to quickly add personal computer access, according to Anthony M. Ficarra, the company's chief information officer.

In this project, unlike other home banking initiatives, Bisys has not partnered with any other servicing companies or banks.

Another-outsourcing company, Electronic Data Services Corp., banded together with two other partners -- U.S. West and France Telecom -- in June to launch its own home banking project.

But Bisys -- a company. whose bread and butter iS still the small community banks that choose to enlist its T0talP!us data processing system -- is flying solo on this venture,

Toe to Toe

"Bisys can bring this service to the community banks, whereas our competition cannot," Mr. Ficarra said. "We can give them a competitive edge against the larger banks that they have to stand toe to toe with."

Bisys worked with three banks, whose names it would not disclose, to develop and pilot some of the services, according to Mr. Ficarra. These three banks -- representing 120 branches -- should have the services up and running by the first half of 1995, Bisys said. Soon after that, other banks that have already signed on are expected to follow.

Customers will be able to pay bills, transfer funds, and inquire about their balances through voice response units.

Personal computing options for -the system should follow gradually in the next year or so, Mr. Ficarra said. Bisys is providing the switch ---which comes online this month, operates out of the company's Houston headquarters, and will connect all the service centers around the country -- and has developed the software for the operation.

Bisys might try to hook up its services to one of the larger public access networks, Mr. Ficarra said. But according to him and chairman and chief executive Lynn Mangum, the servicing company does not have any immediate plans to follow the lead of some of its competitors and merge or form an alliance with a major telecommunications firm.

Mr. Ficarra did say the potential of hybrid networks such as Prodigy and Compuserve does "intrigue" him.

Though so far home banking projects and offerings have fallen primarily into the domain of larger banks, Bisys officials say small banks will also want to offer home banking. "We really believe there's a fairly significant demand for the service," Mr. Ficarra said. "Part of what we'll have to do is help more banks organize these programs."

This home banking project represents a general broadening of services on the part of the outsourcer.

Bisys, like many service companies, has been trying harder of late to establish itself as a "single-source provider to the banking industry," especially to small banks.

Diversification Effort

During the past two years, Bisys has made strides in diversifying its offerings by building up all three of its units -- information, mortgage, and investment services -- with acquisitions and product expansion.

"As a full-service provider of financial services, this is the evolution that we're following," Mr. Ficarra said.

But not all industry watchers see this as the way to go.

"I really think the banking industry is too optimistic about home banking, thinking everyone is going to jump in and use it," said M. Arthur Gillis. "The masses of banking customers will not adapt to that kind of electronic banking."

Citicorp and Chemical Banking Corp. both abandoned projects in this area because they did not elicit enough positive response from customers, according to Mr. Gillis. However, both banks have since reentered the market.

Although he foresees a "rude awakening" for banks and vendors entering this market, Mr. Gillis added that Bisys has the wherewithal to get through relatively unscathed.

"They can cover it -- they're smart and they know how to stick their toe in," Mr. Gillis said. "They're not going to jeopardize their situation."

He added: "They're probably doing it because they don't want to be left out."

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