Microsoft Corp. is increasing the options available to financial institutions that deliver banking services with its Money personal finance software.

The software giant said it is publishing "open financial connectivity" specifications, which banks and service providers can use to build processing systems that can handle home banking transactions from Microsoft Money.

Intuit Services Corp., owned by a Microsoft competitor, is the only current processor of home banking transactions through Money. Visa International plans to process transactions from Money users starting this summer, and Microsoft expects other processors to be in the market using its specifications by then.

Observers say the emergence of more processors would drive down prices and improve the services.

"I think this continues to turn up the heat on Intuit," said David Weisman, an analyst with Forrester Research of Cambridge, Mass.

Intuit Inc., which makes the market-leading Quicken personal finance software, "has become less of a software company and more of a processing company, a financial services intermediary," Mr. Weisman said.

"It will be really interesting to see how Intuit, and particularly Intuit Services Corp., will react to this," said Phoebe Simpson, an analyst with Jupiter Communications Co. in New York City.

The announcement was tied to a gathering Monday of about 200 bankers and service providers at Microsoft headquarters in Redmond, Wash. The software giant also announced plans for a new set of Internet tools and the formation of a desktop finance unit to help financial institutions create on-line services.

Matt Cone, product manager for Money, said the announcements differentiate Microsoft from its competition.

"It's a very different strategy and approach" compared to Intuit's, he said. "We're not in the processing business. We're not in the middleware business."

Bruce Burchfield, chief executive of Intuit Services Corp., saw Microsoft's moves as positive in the sense that "anything that creates demand for the business helps everybody."

In addition to opening the door for other processors, the Microsoft specifications pave the way for financial institutions to build direct connections to customers via a private network or the Internet. The latter type of connection would eliminate the need for a third-party processor.

In the short run, Mr. Cone conceded, most banks will probably opt for closed or private networks instead of the wide-open Internet. But the announcement gives banks "training wheels" for Internet offerings, he said.

Ms. Simpson of Jupiter Communications said the concurrent formation of the desktop finance division foreshadows a much wider range of software applications from Microsoft, including those for loans, financing, and credit cards.

Mr. Cone pointed out that Microsoft is underscoring its commitment to financial services. The industry is Microsoft's largest revenue source other than the government.

Mr. Weisman of Forrester said Microsoft may well use the desktop unit to make a bigger play for the financial services market with its Windows NT server technology.

In addition, Microsoft plans to offer by yearend a series of software tools designed to help banks build richer sites on the World Wide Web.

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