Electronic Data Systems Corp. has formed an alliance with an interactive media company that may herald some bold initiatives in remote banking services.
The partnership between the giant computer-services company and Dallas-based IT Network Inc. gives EDS' customers a way to reach out to consumers through cable television.
Interactive television has been touted as a p6tenfially limitless deliv.ery channel for products and services that require instantaneous two-way communications.
But this medium has been largely ignored by the financial institutions exploring in-home delivery systems. Most have preferred to use telephone- or PC based channels.
The EDS alliance promises an exciting list of options that could change bankers' outlook on home banking and on ways they might enter the market.
"The banks have to have electronic alternatives," said Neil Marcous, a vice president and general manager of EDS' electronic commerce division. "They have to offer an entire array of services to customers."
EDS and IT plan to start rolling out services on their Interactive Channel platform in the first quarter of 1995.
The venture may begin working with financial institutions by late 1995, Mr. Marcous said.
Financial institutions, Mr. Marcous suggested, need to consider the possibilities of providing more than just a basic banking and bill-paying package via the new in-home media.
Because he anticipates these services will eventually be widely available, Mr. Marcous said the financial industry must consider including catalogues and video-on-demand services to retain customer loyalty.
"If these things are possible, someone will be offering them in a greater and greater way," Mr. Marcous said. "Consumers make decisions based on overall convienience."
As traditional brick-and-mortar branch systems become increasingly displaced by remote service options, banks will face more and more competition from outside their industry.
Banks could add fee revenue and gain a place on the information highway by bundling their services with others' through service and back-office-support alliances with companies like EDS.
EDS has been heavily involved in both interactive television and home banking.
For more than two years, the PIano, Tex.-based subsidiary of General Motors Corp. has been in joint projects with the likes of Spectravision and Apple Computers.
They offer video on demand EDS plays a role in digitizing and encrypting movies chosen by hotel guests - and provide Sharper Image and Sears catalogues to consumers on CD-ROM.
EDS is also a 50% partner in Interactive Transaction Partners, one of the more notable home banking projects to date.
U S West and France Telecom, through a joint venture, own the other 50% of ITP, which on Sept. I announced the signing of it first two institutions to provide home banking and bill-paying service.
ITP uses the first two initials of its name - coincidentally the acronym for interactive television and the name of its newest alliance partner - to describe the components of its home banking program. For example: BankIT, PayIT, BuyIT, MailIT.
ITP offers to "facilitate" financial institutions' entry into interactive services by whatever types of telephone or terminal they choose.
While conventional telephones, screen phones, and personal computers have gotten most of the attention, officials at EDS have great expectations for the television format.
"Studies say that most people watch more cable than they spend behind a computer," said Frank H. Haener, a vice president and interactive multimedia specialist in the media division at EDS.
"We're focusing on the growth and the potential growth of the IT Network."