For the increasingly vocal minority of retail bankers who believe they see how the high-technology future can work, 1994 will go down as the year of the wake-up call.

It came first from Microsoft Corp. chairman Bill Gates, quoted in a July Newsweek article to the effect that banks had become "dinosaurs."

It was repeated in many technology advocates' budget presentations to chief executive officers, who in past years tended to give such entreaties short shrift.

Thanks to Mr. Gates and to a seemingly endless stream of "information highway" news, some of the country's senior-most bankers began to open their minds and coffers to new ways of delivering services via computer.

And the few who had already been making significant investments found new justification for pursuing an entire range of "alternative delivery systems," of which home banking by computer was only the most leading-edge.

As of 1993, a majority of consumer banking transactions were being performed outside traditional branches - a fact that escaped many bankers until the Bank Administration Institute and First Manhattan Consulting Group published their landmark delivery systems study at the end of that year.

But all of that is prelude. Mr. Gates' vision of a wired world of free and easy electronic commerce is light-years ahead of most bankers' thinking. The self-styled visionaries are convinced - and increasingly are convincing their management colleagues - that the revolution has already arrived.

What no one knows with any certainty is how it will play out in 1995 and beyond, and who in banking or elsewhere will best figure out how to play according to new rules that neither they, nor their regulators, nor their friendly Republican-led Congress, will be able to control.

The uncertainties are epitomized by Microsoft, the world's largest software company, which wants eventually to be the conduit for electronic transactions of all kinds - or maybe even all transactions of any kind.

When Microsoft announced last October that it agreed to pay $1.5 billion for Intuit Inc., the dominant provider of personal finance software under the name Quicken, even the bankers who accepted Mr. Gates' dinosaur imagery began to quake.

Could Microsoft become so powerful that it will set the new rules of the game? Could it become a competitor itself for financial services, even while banks must work with its software?

"The industry is not taking due notice of the competitive threat," said William Randle, senior vice president of marketing and strategic planning at Huntington Bancshares in Columbus, Ohio.

"I can remember people saying Charles Schwab, Merrill Lynch, and Fidelity were not a threat," said Mr. Randle, who in 1994 tried to sound the alarm about what he fears will be a further loss of control of banking's customer relationships.

In the brave new world that Mr. Randle sees taking shape, financial institutions need to be wary not only of Microsoft and other technology and media players, but also of known quantities like MasterCard and Visa, which have their own networks and interests to protect.

Some of his counterparts, he said, have shown "a little bit of ignorance and naivete" in overlooking these perils.

Although many bankers are quick to point out that home banking has been around for more than a decade, it only recently began to make substantial progress.

Most of the successes have been propelled by nonbanks like Microsoft or Block Financial Software, often in partnership with financial institutions.

Mr. Randle says consumers' demands are driving these new developments. These consumers - more comfortable in recent years with technology and the availability of bank services through remote delivery systems - have come to expect close and immediate access to their accounts.

In Mr. Randle's view of things to come, "Your competition is just a phone call away, and banks could become just another item on the menu."

This may be well and good for a software company like Microsoft or a start-up computerized shopping and payment system such as that of First Virtual Holdings Inc., which have no investments tied up in physical infrastructures.

But for bankers burdened with extensive branch systems, the natural reaction is to want to stave off the coming age of electronic banking as long as possible.

That could be their downfall.

"The banks have been passive for too long," said Wayne Boucher, president of the Electronic Funds Transfer Association, Herndon, Va. "They thought they had an exclusive franchise . . . and they could stand to lose it."

While bankers keep an anxious eye on their brick and mortar, innovative competitors may zip by them, or even wedge themselves into the banks' treasured customer relationships.

At least one industry observer has little faith in banks' ability to make necessary, radical changes.

"They'll do as well revolutionizing themselves as IBM did with PCs," said Serge Beauregard, a software entrepreneur and former chief information officer of the Newtrend banking software company. "They'll wake up too late, after they've lost too much market share."

Mr. Beauregard suggested that to thrive, or even survive, banks need to bite the bullet and seriously pare their current operations - "eating their young to give birth to new business," as he put it.

Nonetheless, he believes the "terribly inefficient" managements of banks are no match for well-run software companies. And like other industry oracles, he believes bankers are blind to their own shortcomings.

"They're smoking dope or something," he said. "If it was up to them the industrial revolution never would have happened and people would still be grazing sheep."

Mr. Beauregard said banking could thus find itself "in deep crisis" in five to 10 years. He suggested that banks set up small teams dedicated solely to creating electronic services.

Several major banks are already taking that approach. Citibank is building what it calls a "virtual bank," advertising that it can serve customers "anywhere, anytime, (in) any way."

Huntington and First Chicago Corp., among others, have adopted "direct banking" - an approach pioneered by Midland Bank of London - to serve customers only by telephone and other remote or self-service means.

In April 1994, Chase Manhattan Corp., a partner with Microsoft in its Money software program, established a unit to explore new retail delivery systems, including smart phones, computer-based services, and advanced automated teller machines.

But even for their progressive stance on electronic commerce, Chase officials do not profess to be certain about the future.

"I don't think banks are losing a strategic edge if they're not out there," said Mark Burns, vice president for on-line services at Chase. "For smaller banks, this is not the time to start. This is not a business to go into lightly, standards are shifting, and it is not clear whether it will become a transmission medium or an information medium."

While he recognizes the "great deal of activity" in high-tech financial services, Mr. Burns still feels it is an "immature market" that still leaves many questions unanswered and much room for improvement. With all the hype, he said, many bankers may be tempted to jump the gun.

The mass consumer market has yet to embrace the new means of banking, and the group of users may grow gradually, he said.

Seeing a parallel in ATM networks, Mr. Burns pointed out that much of the public still views automated tellers as "primarily a cash withdrawal mechanism," even though they are capable of much more. Similarly, customers may not be ready to take full advantage of the new remote services as quickly as banks can develop them.

"We can all envision the capabilities, but we are not looking at the applications," Mr. Burns said. "There's too much technology and not enough doing."

Disparaging the fear that any of the nonbanks involved in this electronic revolution could claim any of the banks' turf, Mr. Burns said the financial industry has advanced well beyond the "image of the technophobic gray-suited banker."

"If we're not considered the pacesetter, perhaps it's because the pace is not appropriate," he added.

"Being banks, they are going to move slowly because they don't want to risk the assets of their customers," said Mark Frieser, a senior consultant with Jupiter Communications.

Not so constrained, Microsoft, alternately seen as valued ally and greedy villain, is working hard to portray itself in a favorable light to the banks that are potential partners. The software giant has already worked with Chase, U.S. Bancorp, Michigan National Corp., and First Chicago to integrate banking services with the Money personal finance software.

Rumors flew in the wake of the Intuit announcement that Microsoft might acquire a bank. Officials at the Redmond, Wash., company deny them, saying it has no intention of messing with the all-important banking relationship. It does want to facilitate the process and the transactions.

Bill Gates, interviewed in the Jan. 16, 1995, Fortune, called the bank ownership idea "ludicrous."

Leslie Koch, Microsoft's general manager for personal finance products, said banks should view these new services as an opportunity to distinguish themselves from rivals.

"Instead of expending all their energy on alarm and concern," she said, "they should put a toe in the water."

But the specter of disintermediation still haunts an industry that has been battered by all manner of less regulated competition.

"Whoever controls the network controls the customer relationship," said Mr. Randle of Huntington Bancshares. "I've heard bankers say, 'My brand will carry me.' But a Microsoft brand is far stronger than any bank brand in the country today."

"The banks are in the same business as Bill Gates, and they don't know it," said Richard Crone, a senior consultant at KPMG Peat Marwick.

Like Mr. Beauregard, Mr. Crone sees a sea change that is carrying banks away from a transactional business and into the information business. This year, Mr. Crone said, banks and nonbank players will lay a foundation for the coming era.

Electronic banking will follow an acceptance curve similar to that of electronic draft capture at credit card merchants, Mr. Crone said.

It will take about 10 years to reach the market and then another two or three years to be widely accepted. Bank customers are in the first year of that acceptance cycle, he said.

"This will be the year when the winning positions are taken," Mr. Crone said. "After that, they'll all be followers, fighting for an inch of space on the computer screen."

"The battleground is the information superhighway, and the weapon is information," Mr. Randle said. "The effects are just beginning. We're on the verge of much more of a change than commercial bankers are anticipating."

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