Rebellion may be brewing in the ranks of the Integrion home banking consortium.

Some of the 15 member banks, disenchanted with the lack of progress in what was billed as a crucial investment in an on-line infrastructure, are balking at a call for additional investment.

The unrest has simmered to a point where some members are calling for a change in management, according to someone who was at a board meeting in early November.

The developments are calling into question the group's viability-at least in its present form. Structural changes are said to be in the offing, perhaps leading to a smaller ownership group.

Integrion Financial Network is widely viewed as not having delivered on the promises made when it was created in 1996 as a bank-controlled provider of interactive banking technology. With International Business Machines Corp. playing a key role as a consortium member and network supplier, each bank put up $4 million and expected to share in cost savings and other benefits.

Tensions apparently came to a head when Integrion officials asked for the next round of capital. Sources were unable to confirm that as many as eight banks expressed reluctance.

Multiple sources did say they heard a call for the resignation of William M. Fenimore Jr., chief executive officer and managing director of Philadelphia-based Integrion.

Mr. Fenimore denied that his job is on the line and that banks are refusing to make their payments. He confirmed that Integrion is in need of "another round of capital in 1999" and said "we are working that through with the board right now."

Among the outside sources, there was no dispute that dissatisfaction is pervasive and could flare again at the board meeting scheduled next Tuesday.

"Banks are extremely unhappy with the progress Integrion has made," one observer said.

"Integrion is a huge failure," said David C. Stewart, vice president of Global Concepts Inc., a Norcross, Ga., research firm that deals with many leading on-line banks. "The banks have poured millions into this thing with questionable results."

Among the complaints are Integrion's use of outmoded technology, the unwieldy size of the ownership group, and excessive dependence on IBM.

"Integrion has gone from being a bank-owned association to a vendor solution" provided by IBM, Mr. Stewart said-a characterization Integrion and IBM have disputed.

The IBM Global Network that supports Integrion was described by one source as "incredibly bad from day one." Said another, "The Integrion network is a dog." IBM is considering selling this network.

An IBM spokeswoman said the network, which serves 45,000 companies in 100 countries, has won high ratings from independent research firms. One recently gave it four stars for remote access services; another rated it superior among Internet service providers.

Another issue was Integrion's purchase of the Visa Interactive operation last year, which made Visa U.S.A.-itself facing governance and resource- allocation questions posed by some of the biggest banks-part of the ownership group. Integrion puzzled many by subsequently signing with Checkfree Corp. for bill payment services, instead of basing its offering on capabilities acquired from Visa.

Mr. Fenimore said the Visa deal, which consisted of Visa Interactive's fulfillment operations, let Integrion strike an "economically advantageous price" with Checkfree.

Five banks are using Integrion's IFS-Interactive Financial Services- platform to support transactions such as bill payments, account inquiries, and funds transfers. These banks have been adding roughly 2,000 users a day for several months, Mr. Fenimore said.

By yearend, he said, Integrion will be the backbone for delivery of home banking services to 750,000 people.

"Compare that to any other individual provider, and you'll find that to be a pretty impressive number," Mr. Fenimore said. "I think by next year we'll be by far the largest provider of end-to-end services."

The banking companies that have gone live with Integrion are BankAmerica, Bank One, PNC Bank Corp., the Michigan National unit of National Australia Bank Ltd., and ABN Amro. Washington Mutual Inc. and Mellon Bank Corp. are in pilot tests and expect to go live no later than January, Mr. Fenimore said.

Working with Checkfree, Integrion expects to have bill presentment running at Bank One in January.

Today, Chicago-based Bank One uses Integrion "only for one piece of the puzzle-to serve up Web pages," said Kenneth T. Stevens, vice chairman and head of the retail group.

Bank One's on-line banking system, including the Integrion component, was selected as the surviving platform in the merger of the old Banc One Corp. with First Chicago NBD Corp. Integrion is "doing a good job," Mr. Stevens said.

Integrion is dominated by big banking companies, many of them involved in major mergers and reassessing both investment priorities and past results. Merger partners Bank One-First Chicago and BankAmerica-Barnett- NationsBank were all Integrion members, as are Citibank, Wells Fargo & Co. (through the old Norwest Corp.), First Union Corp., Fleet Financial Group, Royal Bank of Canada, and U.S. Bancorp.

Such titans can increase the pressure on Integrion to perform or otherwise bow to their desires.

Contributing to the urgency and uncertainty is Electronic Commerce Trust Co., a proposed bank-owned consortium that a few Integrion members and others have been looking into as a vehicle for electronic bill presentment and real-time payments. Dissatisfaction with Integrion is "one of the major reasons why ECTC was created," said Edward Neumann, managing director at Farragut Group, a Washington consulting firm.

Patrick Swanick, vice chairman of Integrion member KeyCorp, said, "There are a number of initiatives under discussion that we will review" at the Dec. 8 meeting.

"There is a lot going on in all of our businesses, and we have to iron things out and get our plans together for 1999," he said.

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