Trade Group Takes Shape

The description might be an oxymoron, but James M. Shelton is a trade association entrepreneur, and he has a new idea.

He is currently trying to organize an Online Banking Association.

If his track record is any indication, interactive banking could be on its way to market acceptance.

In the late 1980s Mr. Shelton launched the Bank Securities Association and Financial Institutions Insurance Association. They thrived in the 1990s, each with around 300 members, as banks went into investment product businesses in a big way.

Mr. Shelton, who is based in Corte Madera, Calif., has scheduled the Online Banking Association's "inaugural convention" for April 29 to May 2 in Santa Clara, Calif. By then, he expects to have a board of directors and be searching for a full-time executive director.

He vowed to represent "all types and sizes of banks and thrift institutions," and is undaunted by the proliferation of conferences and the growing interest of established trade groups in on-line issues.

"A lot of people are dabbling in different aspects of this," he said. "We can be very focused, without a lot of distracting interests."

For the first splash in Silicon Valley, Mr. Shelton scheduled Intuit Inc. chairman Scott Cook as keynote speaker, plus presentations by Michael Killen, a leading Internet researcher; payment systems pioneer Dale Reistad; and Security First Network Bank chief executive James S. Mahan, among others.

May 1 is blocked out for a field trip to the Internet World conference in nearby San Jose, where Microsoft Corp. chairman Bill Gates and Sun Microsystems co-founder Bill Joy are speaking.

"At this stage, these kinds of meetings play a constructive role," said William Randle, senior vice president of Huntington Bancshares, who agreed to make the on-line group's opening speech April 29. "So much is happening so fast that it makes sense for people with common interests to share perspectives on a regular basis."

Mr. Randle, who is active in several banking groups, said he had not yet decided whether to become a member.

Beyond the Hype

Business executives suspicious of "Web hype" found an outlet in a recent survey sponsored by KPMG Peat Marwick.

Of 660 senior executives from various types of information technology companies, 70% said it was important that they have a World Wide Web address on the Internet. But only one-third actually had such sites, the preponderance of them companies with annual sales above $100 million.

Among companies with less than $10 million in annual sales, 28% have a site. KPMG's information, communications, and entertainment practice, which conducted the poll, said many people were unable to say why they had corporate Web sites.

"Commerce via the Internet is still several years in the future," said national managing partner Roger S. Siboni. "The No. 1 reason to be on the Web is to be cool. Secondarily, people want to jump into the water and begin to swim around."

Other soundings:

*University of Pittsburgh information science professor Daniel F. Galletta, in the Feb. 16 Washington Post, complained the Internet is so slow, unreliable, and unwieldy, that it has turned off a lot of early adopters who had overly high expectations. "Internet use will soon drop and stay down as long as the present barriers exist," he wrote. "The press will then overreact with stories on 'the failure of the Internet,' and there we will all be, let down again by technology."

*Steve Jobs, founder of Apple Computer Inc. and Next Computer Inc., said in the February Wired that the Web, though an important development, will not "be a life-changing event for millions of people ... It'll probably creep up on people. It's certainly not going to be like the first time somebody saw a television. It's certainly not going to be as profound as when someone in Nebraska first heard a radio broadcast."

Spooks on the Web?

When MasterCard and Visa announced their long-awaited agreement in February on a security protocol for Internet payments, they had a new guest at their table.

Credited as one of the participants in the project - alongside such others as IBM, Microsoft, and Netscape - was Science Applications International Corp.

Bankers may be hearing more about SAIC, which is just beginning to market consulting services to them. But it already has a cachet in military and intelligence circles, and causes suspicious reactions among certain conspiracy theorists.

SAIC joined the Secure Electronic Transactions protocol team as a result of a consulting contract with Visa International. San Diego-based SAIC reports $2 billion in annual revenue, mostly from defense contracts, and has strong data security credentials that certainly came in handy in drafting the transaction standard. Its offices and board are said to be rife with former national security people; one director is ex-CIA official Bobby Ray Inman.

Stephen Pizzo, an award-winning investigative reporter for his work on the savings-and-loan crisis, now senior editor for the on-line magazine Web Review, views SAIC as a potential Internet snoop. Its participation on the Secure Electronic Transactions protocol team thickens the plot.

Last year SAIC purchased Network Solutions Inc., which administers the system that prevents two companies from registering the same Internet domain name. Mr. Pizzo says it is no coincidence that shortly after the acquisition, the registry fee became $50, up from zero when the government set the rules.

SAIC, of course, denies anything sinister is at work. Visa officials praise the firm for bringing a fresh outlook to the transaction protocol discussions and being instrumental in the happy conclusion of those negotiations. An industry observer added that SAIC is less interested in "snooping" than in being familiar with the Net and its national security, or "information warfare," implications.

Meanwhile, Mr. Pizzo wonders why SAIC was designated as "Webmaster" for the Republican National Convention this summer in San Diego.

"O.K., they may be good at what they do," the journalist said. "But it's naive to assume SAIC lands these contracts solely on the merits. It's way too well-connected."

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