To the folks running Integrion Financial Network (IFN), the Philadelphia-based bank information technology consortium, a trip to the amusement park would be redundant. After all, how do you top a 48-month roller coaster ride that makes Coney Island's old Cyclone look like a merry-go-round?

Launched in 1996 by 17 banks, IBM Corp., and Visa USA, Integrion provides interactive home banking and electronic-commerce services to financial institutions. Through its Interactive Financial Services (IFS) platform, Integrion gives financial services firms a network through which electronic transactions flow from multiple consumer access points to a bank's host system or processor. Technology partnerships with IBM and CheckFree Corp. give the consortium additional options-like access to IBM's financial services applications and to CheckFree's Genesis proprietary bill payment and processing system-in the types of online banking applications it can provide for its clients.

Integrion's recent ups and downs have provided cannon fodder for the business media and cause for dismissal by some financial industry insiders, who don't trust consortiums in the first place. "Consortiums are a losing proposition anyway you look at," says Avivah Litan, research director at GartnerGroup, Stamford, CT. "Either the consortium succeeds and becomes the enemy of the bank or it doesn't. Either way it doesn't matter."

Lofty goals

What's all the fuss about? In a nutshell, since its inception, IFN has had some fits and starts delivering on its promise to dominate the Internet banking sector and make its myriad partners online financial services supernovas in the process.

Not that the original partners were lacking deep pockets and big brand names in the first place. The original lineup looks like a "who's who" of the banking world, featuring marquee luminaries like Bank of America Corp., Bank One Corp., Citibank, First Union Corp., Royal Bank of Canada, and Wells Fargo & Co. Other major players include ABN AMRO Holdings NV, Comerica Inc., Fleet Financial Group Inc., IBM, Liberty Mutual, Mellon Bank Corp., Michigan National Corp., PNC Bank Corp., U.S. Bancorp, and Visa USA.

IBM and Visa have been with the consortium since the beginning. Each company contributed $4 million to the consortium's Internet banking and e-bill efforts.

The Armonk, NY-based computer giant developed the central component to Integrion's Web banking strategy, the Interactive Financial Services platform. The IFS is billed by Big Blue and the consortium as a real-time middleware solution that connects multiple electronic access devices with financial institution legacy systems. Through IFS, Integrion members could leverage a shared investment and achieve economies of scale that they couldn't do alone. A good idea, considering that at the time of the Integrion launch, consortium customers represented more than 75% of the households in the United States and Canada.

Growing pains

But Integrion's managers tripped up in several key spots, critics say, most notably in the nascent, but potentially lucrative, bill payment and presentment market. Even though the consortium had developed its own bill payment engine, it was using CheckFree's Genesis engine instead. That opened the door for more industry competitors-like Internet Payment Exchange Inc., and Spectrum, backed by Wells Fargo, First Union, and Chase Manhattan Bank-to build their own e-bill payment switches to link bill payers and payment receivers. "It was a missed opportunity for Integrion," Litan adds.

Adding more fuel to the fire of critics, in April 1999 Integrion reduced the impact of 12 of its 15 member institutions (already down from 20), leaving only Bank of America, Bank One, and Washington Mutual Inc. on board as major financial backers. The other financial institutions would continue to use Integrion's technology but not contribute nearly as much in funding. Proponents called it a move toward more cohesive and streamlined governance. Critics compared it to the swells grabbing the first lifeboats on the R.M.S. Titanic.

"The restructuring certainly has the potential to streamline the decision-making process," Octavio Marenzi, former research director at Meridien Research Inc. said at the time. "But it's not exactly a ringing endorsement to go from 15 to three primary banks".

To top things off, changes at the top were made in September 1999, when Integrion CEO William Fenimore Jr. resigned his post. Former COO Christopher Schellhorn took the reins, with the help of managing director Maurice St. Jean, formerly of Royal Bank of Canada, which opted out of the consortium in the April coup.

Who's laughing now?

To paraphrase Mark Twain, despite the consortium's string of bad news, reports of Integrion's demise could be greatly exaggerated.

Considering that Integrion's user base just zoomed past 1.5 million users, among 13 banks, and is adding new users at the rate of 100,000 a month, how bad can things be down in Philadelphia? Major activity comes from BofA and Bank One, which have the largest customer bases on the IFS platform. Washington Mutual is also growing rapidly, according to Integrion, having launched with the firm last year, and PNC also has over 100,000 end users.

"It's fair to say that we have taken our share of licks from the media," says David Fortney, chief development officer at Integrion. "But we would argue that our track record at this point speaks for itself."

In a recent conversation with Fortney and Todd Pittman, the company's chief financial officer, the duo maintains that what some perceive as bad news is actually good news.

"People can call things what they want, but what happened in 1998 and 1999 was simply a restructuring of the company," Pittman claims. "We had to move from the original 20 members to gain better control over the product. Besides, all the other investors are welcome to come back whenever they please."

Too many cooks?

But would they want to? Some industry observers don't think so. "I have not seen any announcement or commitments from even one of the consortium members that would cause me to think this thing will succeed," says George Barto, senior analyst at the GartnerGroup. "On the face of it, the idea is a bad one. Consortium members supporting each other-the competition? How can Integrion win?"

Fortney concedes as much, when he says the critics were right about at least one aspect of a consortium. "It's hard to build a consensus when you're dealing with 20 companies," he says. "So winnowing down our member base left us in a much better position to react to the marketplace we compete in and make better decisions. Having lots of owners is a great idea until you try fitting them all into a boardroom."

But as Barto notes, getting them together into the boardroom may not have been a great idea in the first place. "The consortium members have already proven they will jump ship and make other deals with home banking vendors," he says. "And for the banks that remain, it's tough getting them to agree on anything. Putting Bank of America and Bank One into the same room together is not going to work."

Fortney counters that the consortium's recent rise in fortunes is rooted in having different bank members-not the other way around. Standing in the way of Integrion's progress had been a slew of reorganizations and consolidations from the three remaining banks, he says.

"All three banks in the past year have undergone changes and migrations of their own," Fortney comments. "So while each has been digesting some of the banks they acquired, they've been moving those systems onto our systems during that process. Consequently, we did a lot of blocking and tackling while helping them out, all the while focusing on service delivery."

Both Fortney and Pittman say that working with a group of high-profile banks doesn't leave much room on the public-relations stage for Integrion. That may account for some of the bad press, but neither man is complaining.

"We are growing, and despite all the predictions we're still here," Pittman says. "In fact, we're thriving. I've never bought into the notion that we're supposed to create some sort of marketing hype over Integrion. We're in the business of developing a great online banking platform for our customers, and we're doing that."

Fortney takes that argument one step further, charging that critics who

slam Integrion only do so because the

consortium is comprised of big brand-name banks.

"There's hype and there's reality," he argues. "We really act behind the scenes creating the plumbing that enables our customers to get the products online. But because you are the largest bank, you are a bigger target."

Next in line

Down the road, Integrion continues to target large and midsize regional bank customers, in what Fortney describes as "a long and complex sales process." That doesn't mean the company is excluding smaller customers, but for now Integrion is content to pitch its stake near where the gold is buried.

"We're not going to be out there marketing to a large number of institutions," Pittman says. "In fact, we've really been focused on meeting the needs of our four customers. NationsBank and Bank of America brought us a lot more volume, as did Washington Mutual with its merger."

Bill presentment is a big item on the docket for the consortium, with the completion of Integrion's migration to the CheckFree platform locked and loaded. Pittman adds that Integrion is also working on a bill presentment package from Bank One.

"Integrion does have a good partnership with CheckFree, the leading electronic payment processor," says Paul Hughes, senior analyst at Boston-based Yankee Group. "Within CheckFree's data center, there's a high-tech processing gateway that puts the payment responsibility in CheckFree's hands, not Integrion's. That business will remain proprietary for CheckFree, and its core business. With processing fees at about 25 cents per transaction, CheckFree will not want to lose that business."

That's okay with Integrion. "A big focus in 2000 is to expand our bill payment and presentment offerings," Pittman says. "Now that the reins have been taken off, we'll see a lot of movement in that area this year."

If that sounds like an executive at a company with a new lease on life, then so be it. To Pittman, it's what he always expected. "There's no surprise here on [whether] we came back or not. We've really never been away."

Contributing editor Brian O'Connell lives in Framingham, MA.

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