Consumers may finally be inviting banks into their homes.

Until now, home banking has never really got its foot in the door. But 10 years after the first remote access system was introduced, banking from home is on the rebound, according to the latest American Banker/Ernst & Young Survey of Technology in Banking.

Well over half of the industry currently enables its customers to bank from home - a fundamental shift from last year's reading, when half of the industry gave home banking a thumbs-down, according to the survey.

"We're seeing a fundamental shift in bank delivery," said Sean W. Kennedy, president of the Electronic Funds Transfer Association, Reston, Va. "There's no doubt that the industry is experiencing a redefinition of distribution services that are sure to take hold this time around."

Why the sudden pickup in home banking experiments?

The answer has much to do with the current climate of the industry. More than ever, banks are dead set on offering the newest in customer convenience, while at the same time stripping operational expenses to the bone. For the first time. home banking is becoming a viable alternative to staffing existing branches or breaking ground for new ones.

"It's the riddle of the sphinx," said Chris Armstrong, executive vice president at Maryland National Corp., Baltimore. "The riddle is that consumers want time/place convenience and banks want to do transactions cheaper. The industry is realizing that offering services from remote locations is in fact the way to do that."

There are many reasons why home banking has had such a checkered past. Technologists are quick to blame high production costs and the inability to penetrate the consumer banking market.

"There was no real plan to effect a change in delivery strategies, and banks didn't make the kinds of investments needed to break into the market," said William M. Randle, executive vice president at Columbus, Ohio-based Huntington Banc-shares Inc.

Perhaps the highest profile pairing - and failure - of late was Huntington's partnership with American Telegraph and Telephone Co. to develop the Smart Phone. The much-bally-hooed project bit the dust earlier in the year - yet another setback for home banking.

Despite the dismal track record, home banking experiments are again moving to the fore, even at Huntington.

According to Mr. Randle, the $14 billion-asset bank is still very much in the game.

"We're moving forward with discussions with outside firms and fully expect to bring a project to market before the end of the year," he said, adding that the effort would be phone based.

However, PC-based access systems are still the medium of choice for most banks, according to the survey.

The survey found that the bulk of the home banking projects already completed were geared toward PC users because of the dwindling costs of the machines and their increasing ease of use - not to mention that 26 million Americans own and use PCs in their homes.

Thus, PCs have generally been an attractive medium for banks to work with.

The most common type of PC link for home banking is still via networking services such as Prodigy. Of the banks currently offering PC access to bank products and services, about 66% use services like Prodigy or Compuserve, while 55% provide direct access to the bank.

Now that PCs have clearly been established as banking tools, technologists agree that the telephone is the next frontier.

"It makes sense for the telephone to be the next target for banks, given that everyone knows how to use it and everyone is willing to use it for other functions," Mr. Kennedy said.

Now banks are marketing more affordable home banking phones than ever before.

The $16 billion-asset Maryland National, for example, offers its Online Home Banking Service, which consists of a special phone that sells for $68.95 and $6.95 monthly fee to access the service. The phone displays information on a four-line screen.

Other banks involved in home banking by telephone include Banc One, Boatman's Bank of Tennessee, and Bank of Boston.

Although some telephone banking projects have failed in the past, bankers are more excited about the prospects now. The reason? Developing intelligent telephone banking systems should be easier this time around because the systems will be largely based on research derived from earlier, failed efforts.

"The industry has learned from the mistakes of the past and is building a base" from which to grow, said Huntington's Mr. Randle.

Much of the research and development for both hardware and software has already been done, and the costs amortized. Thus, many of the home banking phone units currently being offered are much less expensive than their predecessors.

"The industry has found a way to ride some existing rails," Mr. Armstrong said. "The ATM switch, for example, is a set of electronic railroad tracks that banks don't have to create now. The technology was already there. It was just a matter of refining it."

The biggest question mark looms over the future of television banking. The survey respondents were lukewarm about the idea. Just 2% of them indicated that such projects were in progress, and a scant 9% placed a high priority on them for the future. More importantly, a whopping 68% said they were not considering this medium at all.

Bankers say part of the problem is that television banking units - such as one marketed by TV Answer Inc. - require consumers to embrace a new technology.

"Because some of the television-based offerings out there require users to put another box on top of their TV, many consumers may be unwilling to go for it," said Greg Schmergel, vice president of the Tower Group, which analyzed the 1993 technology survey results.

Meridian Bancorp, Reading, Pa., is one of a handful of institutions experimenting with television banking. The bank was the first to sip up with TV Answer to provide bill payment, funds transfer, account balance, and other banking services over the system.

"There's been a change in the way people bank," said Michael Ritter, assistant vice president of electronic banking at the $11.8 billion-asset bank. "Historically the bank has told the customer how to bank. Customers are starting to tell us they want to bank by phone and by TV."

What makes Meridian's television access system different is that information and transactions are relayed over a radio network, rather than over a cable television system.

"We're offering TV banking to provide our customers with yet another way to do business with us," Mr. Ritter said. "It allows us to target people who do not subscribe to cable and who do not wish to pay a large premium every month just to do their banking."

According to the National Cable Television Association, 60% of Americans subscribe to cable systems. As Meridian sees it, that leaves a sizable chunk of the market to target with its wireless television banking system.

Bankers agree that there are still bumpy roads ahead. One problem that is sure to come up again is market penetration. "We still haven't gotten over the penetration hurdle. A big issue is people still don't want to pay a lot for these systems," said Mr. Armstrong of Maryland National.

But like most bankers, Mr. Armstrong philosophizes that cheaper units and the customers' never-ending quest for convenience will make banking at home a logical choice. After a number of high-profile fits and starts in recent years, it looks like home banking may be here to stay.

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