Microsoft Corp. has added life and meaning to its concept of DNA.

Celebrating this month the first anniversary of Windows DNA-fs, the Distributed interNet Applications for financial services, Microsoft said it will make the source code for its Marble Internet banking tools openly available for licensing to systems developers.

Marble, the pre-release code name and nickname for what is officially the Microsoft Internet Finance Server Toolkit, or MIFST, will thus be more closely integrated and associated with the general computing framework that chairman Bill Gates presented to the Bank Administration Institute's Retail Delivery Conference in New Orleans last December.

DNA, designed to overcome the incompatibilities among back-end computer systems, has been gathering speed among independent software vendors and financial institution customers. Among the latter, as announced in October, are one of Citigroup's insurance subsidiaries, Crestar Bank of Richmond, Ohio Savings Bank of Cleveland, and the five-centuries-old Italian bank Monte dei Paschi di Siena.

With Microsoft stepping back from the MIFST distribution business, dozens of software and systems companies are said to be committed to ship products. They include DNA-fs supporters Alltel Corp., Corillian Corp., Edify Corp., Intelidata Technologies Corp., M&I Data Services, NCR Corp., and Wang Global.

The momentum is such that Microsoft banking industry expert Michael Dusche, in an interview this month at the BAI's Retail Delivery '98 in Las Vegas, predicted that bank users will number "in the hundreds in the next 18 months."

Though not many names have been disclosed, MIFST has already been implemented at more than 100 financial institutions worldwide, the Redmond, Wash., company said.

"We set out the vision last year for integrated delivery channels," said Mr. Dusche, making his swan song as Microsoft's worldwide banking industry manager and turning his attention to product management of Smart Card for Windows. His old post has been taken by John V. Grispon.

"Now we are delivering a 'productized' tool kit, based in part on Marble but going past the Internet to the teller window and automated teller machine," Mr. Dusche said.

By releasing the source code, the basic building blocks for programmers, Microsoft is letting independent vendors develop their own value-added twists in compliance with DNA specifications. Microsoft would stand to benefit by selling more of its Windows NT, SQL, and BackOffice servers.

MIFST, introduced in March 1997, "was designed to jump-start on-line banking by allowing banks to build one Internet platform to support consumers using browsers and other OFX clients such as Microsoft Money and Intuit Inc.'s Quicken home banking packages," said Lewis Levin, vice president of Microsoft's desktop applications division.

OFX, or Open Financial Exchange, is a specification endorsed by Microsoft, Intuit, and Checkfree Corp. for exchanges of on-line banking and payment data. Efforts are under way to smooth over differences between OFX and Integrion Financial Network's alternative approach, known as Gold.

Mr. Levin said that given the "growing adoption of Windows DNA-fs by financial institutions, it makes perfect sense for us not to distribute MIFST but to enable our software developers to customize and integrate MIFST offerings into their applications."

"We are seeing strong customer demand for rapid innovation on the MIFST platform," said Charles Stevens, vice president of the application developers customer unit at Microsoft. He said the company's software allies "are the real experts and will be able to satisfy that demand by extending the functionality of the MIFST code much faster and better than we could alone."

"Access to the source code gives us more options for customization," said Michael Cottam of the on-line financial services group of STEP Technology Inc., one of the Microsoft partners.

The code's release "allows us to focus on that larger challenge" of linking all financial delivery channels, said Ted Spooner, chairman and chief executive officer of OFX and Marble devotee Corillian Corp. He envisions "the power to create low-level interoperability across a diverse mix of bank delivery channel applications."

Microsoft set certain conditions for licensees, including a commitment to support OFX and make on-line banking programs compatible with DNA. The company also said it will announce numerous participating independent software vendors after the first of the year.

One of the vendors making DNA-fs announcements at Retail Delivery '98, Phoenix International Ltd. of Orlando, said it is basing a new set of technologies, Aurora, on that framework. It allows management "to think at a high level about the bank's business and not worry about the plumbing underneath," said Phoenix vice president Peter Hazlehurst.

Broadway & Seymour Inc. of Charlotte, N.C., said it has begun development of Windows DNA support for its Touchpoint customer relationship management system. "Although our current message-based architecture is very powerful and continues to perform well for us, the distributed object architecture of DNA-fs provides additional flexibility and benefit," said chief technology officer W.A. Proctor.

Like the others, Wang Global of Billerica, Mass., underlined the benefits of COM-the Component Object Model-approach to reusing software components. As embedded in Wang's Global-fsf retail system, it "gives banks a competitive edge by shortening time to market," said David Goulden, senior vice president of marketing and business development. The reusable components allow Global-fsf to be "customized to meet local market needs while delivering a high level of commonality for multinational institutions.

"By combining the power of DNA-fs and Global-fsf, financial institutions will be able to add customer points of contact and delivery channels quickly and inexpensively."

The word is that Wang Global will be shipping DNA-fs in the first quarter to a top-50 U.S. bank.

Microsoft said its Active Statement technology has been made available to customers of Citibank's Direct Access service.

The technology enables an Internet banking customer to download a bank or credit card statement into the Money 99 personal financial management software, reconcile it, and categorize the transactions for budgeting and planning purposes.

Microsoft said many of the 530 North American financial institutions that connect to Money 99 have chosen the OFX-based Active Statement approach, which it claims is superior to Intuit's Quicken Import Format.

Citigroup's Citibank, which is also working with Microsoft as a co-owner of the Transpoint electronic bill payment and presentment venture, is a key endorser of Active Statement, serving some 400,000 on-line customers.

"Money 99 has provided yet another on-line channel for us to make Internet banking even more accessible to our customers," said Citibank corporate executive vice president Edward D. Horowitz.

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