In a trend reminiscent of one from five years ago, banks are moving swiftly to make cash management services available over the Internet.
In 1993, First Chicago Corp. set off a similar rush to take advantage of the graphical superiority of the Microsoft Windows operating system.
In contrast to the Windows-based software, which proved difficult to maintain and update, cash management services are easily distributed and upgraded at reasonable cost on the World Wide Web.
Lawrence Forman, cash management analyst at Ernst & Young in New York, described the move to browsers as "an unstoppable trend (with) huge momentum behind it."
Major banking companies such as Chase Manhattan Corp., Citicorp, NationsBank Corp., Norwest Corp., and State Street Corp. are in various stages of developing corporate services for the Internet. Smaller banks are getting into the act, too.
Previewing Ernst & Young's annual survey of the cash management industry, to be released next week, Mr. Forman said 65% of the 100 largest banks in terms of cash management revenue are preparing to offer Internet- based information reporting in 1999.
Slightly more than half the banks will offer the ability to initiate transactions, such as automated clearing house payments and intrabank fund transfers, by next year. The study said 30% expect to deliver images of checks and other documents to corporations via the Internet by 1999.
Few if any of these services were available last year.
First Union Corp. said earlier this year that it would apply $70 million to developing new cash management services, many of those for the Internet.
The Charlotte, N.C.-based company-No. 3 in domestic cash management revenue, according to Ernst & Young-is about to pilot a service called WebACHieve, which would let corporations initiate automated clearing house payments over the Internet. First Union also plans to offer Fed Wire funds transfers, trade finance, and information reporting over the Internet.
The $213 billion-asset bank, with 800,000 commercial banking accounts, would make WebACHieve commercially available in December. It would be marketed to small and middle-market corporate customers, said Kevin Leitten, senior vice president of sales.
"One of the biggest benefits is that whenever there are changes, as in state tax codes," software upgrades would be made only once on the network and downloaded on-line, Mr. Leitten said.
Krupp USA Inc., a provider of steel-based materials to manufacturers, said it plans to switch to First Union's browser-based technology.
"WebACHieve appears to be more user-friendly," said Stephen K. Foster, vice president and treasurer of the Ramsey, N.J., company, which currently uses First Union's Windows-based software. "I like the idea that our 40 remote sites can input information," he said, but at the same time, "We can centrally control the release and flow of funds."
He said he was comfortable with the security afforded by First Union's data encryption techniques. Elsewhere, First Maryland Bancorp, Vermont Financial Services Corp., and First Oak Brook Bancshares of Illinois have jumped into the browser-based fray.
Gene Wosniak, vice president of $1 billion-asset First Oak Brook, said its 170 commercial customers were ardent users of a cash management service that was based on DOS, which predated Windows, until the bank put out an Internet product six months ago.
Thirty-five percent of its commercial customers have converted to the bank's WEBS-Web Enabled Banking System. The customers, which include retailers and local municipalities, use the technology for balance reporting, electronic funds transfers, and other functions.
"We are a very small player, but the technology we offer is almost equal to what is offered in downtown Chicago," Mr. Wosniak said.