In an unusual display of hand-wringing, a home banking software entrepreneur has gone public with some less than encouraging consumer research results.

Daniel M. Schley, chairman and chief executive officer of Home Financial Network Inc., said he saw surprisingly little change-and in some cases disappointing reversals-in customer responses over the past year to questions about electronic bill paying.

Rather than keeping the bad news to himself, his prerogative with proprietary research, Mr. Schley aired the gory details in a speech last week to an Online Banking Association conference in Burlingame, Calif.

He expected to be talking about positive trends, as speakers in such public forums are inclined to do. But when it came time to take the podium, he said, "I can't in good conscience tell you what a good job we are doing."

Mr. Schley-who built Westport, Conn.-based Home Financial Network on the premise that home banking services should be about as easy to use as television remote controls-has placed heavy emphasis on market research. That has been his habit since he headed Meca Software, creator of the Managing Your Money personal financial management system, which, like Intuit Inc.'s Quicken and Microsoft Corp.'s Money, was aimed at the sophisticated personal computer user.

Mr. Schley said he learned from his Meca experience that there was a bigger opportunity to reach a mass market with less demanding software. His company's Home ATM banking and bill payment systems, which have been sold to several banks, are designed to be "plug and play" and taught without manuals.

"We have raised $30 million of capital, and I have committed my career to making this work," the head of Home Financial Network said. But when he studied the research results, "I saw my life flash before my eyes."

The company commissioned surveys in both 1997 and 1998 of 300 people with modem-equipped PCs. The respondents were said to be their households' primary bill payers.

This year, 65% said they saw convenience as the primary motivator to make bill payments on-line. That was down from 69%, which could be written off as statistically insignificant.

The same could not be said of the number viewing electronic bill-paying as a timesaver. It went down to 24% from 33%. Only 9% considered the service easier, half the percentage of 1997, which Mr. Schley called "very disturbing."

On the related topic of electronic bill presentment-the delivery of invoices to the customer desktop-awareness was flat, at 24%. The number viewing it as convenient declined to 40% from 54%; those calling it easy dropped to 11% from 21%; and those expressing interest fell two points, to 29%.

"After a year of talking about (bill presentment), we want to think it's in the everyday vernacular, and it's not," Mr. Schley said.

Also worrisome, he said, was that 36% viewed security as a major problem in on-line payment services, up from 10% last year. But when asked whom they most trust to provide the services, 68% said a depository institution, compared with only 7% citing a technology company.

"The customer still trusts you and wants to buy financial management systems from you," Mr. Schley said.

The shortcomings are "not about the technology," he said. "This is about a customer who doesn't want to use technology; it's about education. We are selling a technology before the market is educated."

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