CHRIS ALCAZAR has not entered a bank branch for months. The 25-year-old social worker depends on automated teller machines, using them about three times a week.

Brad Ruben, a 35-year-old patent attorney, doesn't pay his monthly bills by check. He sits at his computer, presses a few keys, and he's done.

These two New Yorkers typify a nationwide trend that some bankers have been anticipating since the 1970s, but that long seemed as if it might never take hold.

Suddenly, it seems all too real for bankers who may not be ready with what are fashionably called alternative delivery systems.

Technology leaders like Barnett Banks Inc. of Jacksonville, Fla., and Meridian Bancorp of Reading, Pa., are preparing in a big way, investing in sophisticated devices for banking from home and other remote locations, talking the language of "interactive communications" and "information highways" -- and hoping to gain an edge over slower-moving competitors.

The 1993 American Banker consumer survey suggests these banks are on the right track and, for once, even a bit ahead of the curve.

The data, compiled in the spring by the Gallup Organization in telephone interviews with 1,009 randomly selected households, indicate that to an increasingly sophisticated consumer Population, automated teller machines are almost oldhat.

Six out of 10 adults have ATM cards. Three out of 10 -- and 42% of those between ages 18 and 44 -- use ATM cards at least once a week.

The machines may be the springboard for what comes next. Significant numbers show an interest in point of sale debit card payments. Larger numbers like the idea of banking via telephone. There may even be a "critical mass" for home banking via personal computer, especially among higher-income groups, which bankers especially covet.

"The customer says, |I want to do my banking at a time and place convenient to me,'" said Joseph S. Pendleton 3d, a Meridian Bancorp senior vice president who is managing a gradual introduction of debit card, telephone-based, and computer-based services.

"We don't want to get hung up on any single device, so our approach is open architecture and multiplatform," Mr. Pendleton said. "We are building a system that will make it easy for us to attach to any delivery system that catches the customer's eye."

Meridian customers can bank from home over the telephone or using the Prodigy personal computer network. Meridian offers Visa Check cards and access to the fast-growing MAC electronic banking network.

Next year the bank plans to test the interactive television technology of Eon Inc. of Reston, Va. Meridian is in leading-edge company: Others in alliances with Eon include Intuit Inc., J.C. Penney Co., Publishers Clearing House, 1-800-Flowers, Domino's Pizza, and the Weather Channel.

In a similar vein, Barnett has concluded that "consumers' definition of convenience is changing," said Catherine Corby, a consultant who until recently was Barnett's director of delivery system planning.

"Whenever customers bring a new delivery channel into their homes -- whether it's a computer or the telephone or interactive television or something else -- Barnett wants to give them a way to conduct banking through that channel," Ms. Corby said.

Barnett is testing screen telephones, developed by Apple Computers Inc. and BellSouth Corp., which allow customers to get account balances, determine if a check has cleared, and order checks. Eventually, users will be able to pay bills.

Already working through the Prodigy network, Barnett plans to participate in an interactive cable television service that Time Warner Inc. will launch in Orlando next year.

Barnett and others in the delivery-system vanguard are increasingly convinced that home banking and other advanced methods will fly; the questions concern when and exactly how.

There are still skeptics who say the most sophisticated remote banking systems are as much as 20 years off. And even most believers in the new technologies say their major challenge will be striking the right balance with traditional modes of delivery.

"It's not going to be a question branch banking or home banking," said Alex W. Hart, president of MasterCard International Inc., which is promoting a home-banking processing system called MasterBanking. "It's going to be branch banking and remote banking." The appeal of each will vary among different groups of customers.

Mr. Hart sees proof in First Direct, a "bank within the bank" developed by Midland Bank in the United Kingdom. It has attracted 400,000 customers, who deal entirely by mail, telephone, and other remote means.

H. Eugene Lockhart, the architect of First Direct who is now an executive vice president at First Manhattan Consulting Group in New York, said some people -- generally but not always the younger and more affluent -- will be more inclined to use newer delivery technologies. Mr. Lockhart is spearheading a Bank Administration Institute research project to match the opportunities with the receptive market segments.

"People in their 20s and 30s are comfortable with technology," said Sandra Drought, director of customer relations and service delivery at Bank of Boston. "They grew up thinking the bank was the ATM. Banks are going to have to deliver services to these technologically adept consumers."

ATMs may be nearing maturity, in a marketing sense.

Of all financial consumers in the American Banker survey, 60% said they have an ATM card -- about the same as last year. Among adults up to age 44, the penetration rate is 70%. Virtually all of those people are ATM users, 60% of them at the rate of four or more times a month.

The average ATM user in the survey does seven transactions a month, and 25% do at least 10. Two years ago, these rates were about the same.

Far less established is point of sale use of cards that move funds directly out of checking accounts.

When asked if they have a MasterCard, Visa, or ATM card usable for direct debiting at retail stores, 18% in the survey sample said yes. The number should be higher; many cardholders have debit capability but don't know it yet.

Debit card penetration in the West is a significantly higher 31%, thanks to the strong start of Visa's Interlink program and Star System's Explore network in California and surrounding states.

Of the respondents, 13% nationwide -- and 20% in the West are debit card users, averaging about four transactions a month. Of people who say they lack debit cards, 23% -- equal to 19% of the total population -- say they are interested in using them.

Despite their prominence, these transaction systems are "one-dimensional," said Sean Kennedy, president of the Electronic Funds Transfer Association in Washington. The real payoff will be in the integrated, interactive, digital information networks that reach into the home, Mr. Kennedy said.

"The eventual end point will be a PC, TV, or modified TV," he said. "That's where the |virtual marketplace' comes together."

He said it is not too far-fetched to imagine, among the emerging hundreds of television channels, one selling mortgages, another selling mutual funds.

"With the amount of money being invested by some very big players, as the number of fiber-optic lines increases, and ATM-type services are routinely delivered to the home, the technological future is coming together faster than we originally expected," Mr. Kennedy said.

A "one-dimensional" indication of the consumer's readiness for the future is the survey's finding that 30% have used a bank-by-phone service. Most of them have done balance inquiries or moved money between accounts, often by making automated commands with telephone buttons. Check-ordering, stop-payment requests, and bill-paying are among other functions that customers have accomplished by phone.

What's more, 59% of the survey sample -- almost all of the people who have not used a telephone banking service -- said they are interested.

"The future of retail banking is the telephone," said William M. Randle, senior vice president and director of marketing and strategic planning at Huntington Bancshares Inc. in Columbus, Ohio.

Aside from the obvious customer convenience, Mr. Randle pointed out, it can cost up to $1 million to build a bank branch, and another $500,000 to operate it for one year. At that rate, he said, it costs $362 to $45 3 to acquire just one new customer. Electronic delivery brings these costs down.

"Surveys of our members show that convenience is the reason people choose where they're going to do their financial business," said Robert McClosky, chief executive of Combined Science Technology and Research Federal Credit Union -- better known as Comstar -- in Gaithersburg, Md.

"Phone banking uncomplicates people's lives," he said. "It streamlines the procedures. Simply by pushing a few buttons, customers can pay their bills and transfer money between accounts. They don't have to worry about stamps and envelopes."

Banks are clearly on this bandwagon. A study of 85 of the 150 largest banking companies by Payment Systems Inc. of Tampa, Fla., showed that 71 offer a basic automated voice-response telephone service.

Some are intensively investigating screen-based telephones as a next step.

Despite the well-publicized breakup this year of its "Smart Phone" development project with American Telephone and Telegraph Co., Huntington is still planning a beta test by the beginning of next year.

"We are not selling Star Trek technology," said Mr. Randle. "Most consumers don't care about that, and many are still afraid of it. We are selling convenience via the familiar simplicity of the telephone."

Comstar plans to make screen phones from Online Resources and Communications Corp. available to its 10,000 members this fall. Mr. McClosky said the system's visual and audio prompts are important for a membership comprised of government and military personnel who, at an average age of 46, are not entirely comfortable with technology.

"People want to use two senses -- their eyes and their ears," said Ms. Drought of Bank of Boston, which is also testing specially designed telephones with screens.

Already comfortable with screens and keyboards are the approximately 13 million households with personal computers.

Of American Banker survey respondents, 18% said they own a home computer with a modem for communications. A majority of that group -- equaling 11% of the total households -- said they are interested in banking by computer.

Among PC owners earning at least $75,000 a year, 76% are interested in home banking. The same is true of 74% of PC owners age 45 to 54, a segment sometimes written off in technology-marketing plans.

But bankers report continuing resistance either to the costs of computer-banking services or to the way they work.

Prodigy, which has 1.7 million subscribers and 16 banks offering services over its network, has turned off Charles Palella, a 41-year-old New Jersey-based professional who generally likes technology. He found Prodigy too cumbersome.

"I would like to see a screen and be able to call up and see the history of my account," he said, describing his ideal service. "I would like to pull up my balances at any time and see what checks have cleared. I would like to do more than banking with the machine. Otherwise, all I would ask is that it be easy to use."

"I have a tremendous fear that the willingness of consumers to pay for these services is overstated," said Ms. Corby. "People will not install an alternative delivery channel just to do banking. However, banking is a nice value-added service that can follow once these devices are in the home."

Upscale professionals and private banking clients presumably would not flinch at the fees for PC banking. Meridian, for example, charges $8.95 a month. "But there just aren't enough" of those well-heeled users to produce significant profits, said Mr. Pendleton.

Screen telephones are more palatable. Payment Systems Inc. has found that 60% are interested in such a banking device -- it "tests better than most other technologies," according to Payment Systems president Allen R. DeCotiis -- and 20% would pay $100 for it, plus a $10 monthly fee.

Interactive television also has the potential to reach a mass market.

Eon, the company formerly known as TV Answer, is developing a system that will allow consumers to order products and services, play along with game shows, and participate in opinion or education forums. Meridian will be ready if consumers want to use it for banking, but the bank's executives concede that this may not be the answer.

"Whatever the customer is willing to do, we can hopefully tack on additional media at relatively low cost," Mr. Pendleton said.

Mr. DeCotiis dismisses interactive television, saying, "Consumers prefer a telephone or other dedicated appliance for financial affairs or bill paying. Imagine turning off a movie or stopping your child's Nintendo game to pay a bill."

Regardless of which system pans out, "We're finally getting to the point where both the technology and the interest are there," said John Russell, senior vice president of Banc One Corp., Columbus, Ohio.

"But I don't think we're smart enough as an industry to discern what device will be most popular. And I don't think we have to. We'll just get our technology ready to handle these transactions, and let the consumer pick whatever he wants to use."

Here's How Survey Was Conducted

THE ARTICLES IN this special report analyze the results of the American Banker's 10th annual survey of consumer attitudes and opinions on issues of interest to the financial services industry.

The 1993 survey is based on 1,009 heads of household. They represent a cross-section of all households in the contiguous United States with at least one account at any type of financial institution. The group was selected using random-digit dialing to ensure that listed and unlisted telephone numbers, as well as newly acquired numbers, had an equal chance of being called.

The Gallup Organization Inc. of Princeton, N.J., conducted the survey. Gallup's financial research division (Carole Hewitson, vice president) also worked with American Banker editors to design the questionnaire and interpret results.

Gallup did the interviewing between April 26 and May 9, 1993. Typically, it took 15 minutes to answer 40 survey questions. The margin of error is plus or minus three percentage points at the 95% confidence level. In other words, for a question on which half of all the participants give the same response, there is a 95% probability that the actual response of the total population would be between 47% and 53%.

The three-point margin of error applies to questions answered by all 1,009 in the sample. Responses by subgroups have greater margins of error.

This report was supervised by Jeffrey Kutler, assistant managing editor of American Banker, and Beth Piskora, assistant managing editor, Management Strategies.

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