It could very well be that America Online, Yahoo! or Intuit will be the "bank" of the future. A technology firm could easily move into financial services either through behind-the-scenes partnerships or through an outright merger. Indeed, Reed disclosed at a forum sponsored last month by Forrester Research Inc. that in the mid-1990s he suggested to Bob Allen, former CEO of AT&T Corp., that Citicorp merge with the phone company. For Reed personally, that probably would have been a great coup. Today he might be the head of one of the world's biggest telecommunications companies as well as one of the largest financial services organizations. Instead, he was squeezed out of Citigroup by Travelers Group's wiley Sandy Weill.Yes, the proposed merger of a banking company and a phone company would have run up against laws that separate banking from commerce, but Citicorp's merger with Travelers also ignored laws that separated banking and insurance. Since then, of course, Gramm-Leach-Bliley has made what had been illegal legal.But Reed's proposed merger with AT&T, or any big carrier such as AOL, still could make a lot of sense. The tone at the Forrester forum was that what has been considered banking now must be viewed in its functional parts. Brook Newcomb, a partner in Forrester, predicts that some organizations will specialize in distribution of banking services while others will provide specialized products, such as loans, deposits or mutual funds. These would be distributed through separate channels, which might be companies such as AT&T, Yahoo! or Charles Schwab Corp.Reed speculated that AOL might have been better off merging with a financial company than with Time Warner. He added that it still could do so. When asked whether Citicorp would've been better off merging with AOL than with Travelers, Reed hedged. But he revealed that one of his board members had argued against the Travelers deal, saying that Citi should consider "merging with a communications-oriented technology company instead."Always the visionary, Reed remarked, "The advantage is going to be with the innovator."

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