Integrion Financial Network announced Thursday a standard for home banking that it hopes will put banks back into the driver's seat.
In introducing what it calls the "Gold standard" for financial services, Integrion's owners-including such heavy hitters as NationsBank Corp., BankAmerica Corp., Banc One Corp., and International Business Machines Corp.-hope to simplify and promote electronic connections between banks and customers.
But the development could create uncertainty among bankers about whether to support Gold or Open Financial Exchange (OFX), the standard agreed upon by Microsoft Corp., Intuit Inc., and Checkfree Corp.
Each standard provides instruction sets that permit bank and customer computers to communicate financial data. A bank's choice of standard would be determined by its customers' home banking software packages.
Although observers expect that Gold and OFX will eventually be merged into a single specification at the core of a potentially vast home banking market, many bankers are adamant that they should control the standard.
Bank control over standards is the goal of the Banking Industry Technology Secretariat, a spinoff of the Bankers Roundtable. A Bits staff official suggested this week that the industry has allowed nonbanks to take too much control of the development of standards like OFX and Secure Electronic Transactions for credit cards. (See article on page 12.)
"Gold creates an opportunity for the entire financial institution industry to define the way the world talks with them, allowing more focus on meeting customer needs versus building proprietary interfaces," said William Fenimore, managing director of Integrion, whose 16 bank owners serve about 60% of the banking population of the United States and Canada.
"I think the Gold standard allows the technology companies to flourish in their role and the banks to flourish in their role," said James Dixon, president of Charlotte, N.C.-based NationsBank Services Co.
Ultimately, Integrion's role could be very significant, said Mr. Dixon. Just as the bank-controlled credit card associations pioneered the move from paper to electronic consumer purchases, Integrion hopes to offer its bank customers a readily available conversion path permitting them to move from bank statements and check writing to conducting transactions electronically.
But it has been through popular software products like Intuit's Quicken and Microsoft's Money that most people have begun to chart the path toward home banking. Until last September, Intuit angered many banks by requiring bank customers using Quicken to connect electronically through the company's payment processing subsidiary.
That policy was dropped when Intuit sold the processor to Checkfree Corp.
But officials at Intuit and Microsoft now say that they are working on the same wavelength as the bankers.
"We do business with the same financial institutions that work with Integrion," said Robert L. Crumpler, senior manager of business development at Menlo Park, Calif.-based Intuit. "We are all moving in the same direction."
Indeed, when Intuit agreed to merge its Open Exchange with Microsoft's Open Financial Connectivity in January, officials at both companies said they were yielding to bankers' demands.
And officials at Integrion as well as the software companies promised that the newly christened Open Financial Exchange would be interoperable with Integrion's Gold standard by the fall. They further said that the standards would be merged by 1998 but offered few details.
This would mean that banks could design programs or Web sites that communicated via OFX and would still be understood by Integrion's Gold or vice versa.
"We are working collectively to assure that there is a clear commitment that the differences between them will be resolved," said Matthew Cone, business development manager at Redmond, Wash.-based Microsoft.
But which computer specification will be merged into the other, and who will control it?
Financial industry players make no bones about their desire that Gold should be the standard.
"We start from different points," said Mr. Dixon, referring to the software companies that support OFX, neither of whose personal financial managers are currently supported by NationsBank. "I do feel firmly that we will migrate toward the Gold standard."
"Gold was developed by (financial) industry players for meeting the needs of the industry and the customers," said Maurice St. Jean, senior manager of alternative network development at Royal Bank of Canada, another Integrion owner.
"It is more robust than other standards which are out there, one of which is OFX. The Integrion owners clearly are very committed to the Gold standard; we are all encouraging them to make it Gold," said Mr. St. Jean.
Gold permits banks to offer consumers access not only through the Internet or through personal financial management software but also by telephone and perhaps other devices.
One analyst said Integrion's strong push for Gold meant that many banks may have to sit out the debate until a single standard emerges as victor. That could delay midsize banks' coming to market with home banking programs.
"The banks don't want to back down and let people believe that the software companies are running the show," said Karen Epper, an analyst at Forrester Research in Cambridge, Mass. "It really is a standoff between the two groups."
Technicians close to the two systems say that Gold and OFX use remarkably similar methods for establishing communications between personal computers and bank computers.
Gold differs chiefly in its ability to handle interbank transfers, which could save banks vast sums on transactions between banks that currently must be cleared by both institutions.
Royal Bank of Canada announced that it would work with Integrion and Meca Software to develop the first Gold-enabled version of Meca's Managing Your Money software, to be available this year.