must love him. The Microsoft Corp. chairman's 1994 remark that banks are "dinosaurs" resonates wherever bankers gather to discuss their future, and that is happening a lot - most recently at the Banking in Cyberspace conference sponsored by American Banker in Scottsdale, Ariz. Mr. Gates, in absentia, was at center stage as some 300 people continued the debate over his true motives, over whether he is really intent on putting bankers out of their misery. While the bankers agonize, no group stands to prosper more than the Bank Administration Institute. Its Retail Delivery Systems Conference, already the hottest item on the annual bank meeting calendar, is three weeks away, with Mr. Gates himself heading the list of speakers. By the time of Mr. Gates' scheduled appearance Dec. 5 in Atlanta, the anticipation might be at a level approaching that of the Windows 95 launch in August, albeit on the single-industry scale.

*** Taking the flak - and a few catcalls - for Microsoft at the American Banker gathering Nov. 3, financial services manager Matt Cone hopefully proclaimed the beginning of the end of bankers' antagonism. Mr. Gates' performance will end it, Mr. Cone suggested, without giving away details of the planned message. Mr. Cone was self-deprecating and contrite. He removed his sport coat to reveal a target on his back. He acknowledged "major PR snafus," including the dinosaur comment. While fielding questions he held up a toy shield. He left a free copy of Money for Windows at everyone's seat. Referring to the 19 banks that offer on-line services to personal computer owners with the Microsoft software, he said, "I'm confident our partners are pleased with the way Microsoft listens to their needs." But based on shows of hands before and after his talk, there was no discernible change in the number of bankers who perceived Microsoft as a threat.

*** Mr. Cone may have been less concerned with winning over that crowd than with preparing the way for Mr. Gates, who will be playing to an audience of up to 5,000 in Atlanta. In an interview, Mr. Cone hinted there will be a multimedia aspect to Mr. Gates' appearance. And he predicted big changes will follow in banking- Microsoft relations. "Microsoft is already a major supplier of technology to this industry," Mr. Cone said. "But in the last year we have really only spoken to the industry twice - with the dinosaur comment and the attempt to acquire Intuit," which raised fears about Microsoft's desire to "control" traditional banking relationships. "A lot is said about who owns the customer," Mr. Cone told the bankers. "Customers have given you the privilege of servicing their needs. That's a responsibility you own. "It's the customers who want to manage their financial information working with a financial institution they choose. They want brand-name services from trusted parties." Mr. Cone's speech ended with a series of "fearless predictions," including: "By one year from now, Microsoft will be a better understood technology provider ... and competitors will stop using the dinosaur comment." Also, he said, "companies investing to defend against the perceived Microsoft threat will have wasted a lot of money," and "Bill Randle will do a Microsoft commercial with Bill Gates."

*** William M. Randle, senior vice president of Huntington Bancshares and an outspoken critic of Microsoft, was not present to appreciate Mr. Cone's dig. The Columbus, Ohio-based banker was chairman of the cyberspace banking conference, but health reasons prevented him from attending. Others filled the breach and took figurative aim at Mr. Cone's target. Paul Harrison, president of Meca Software Inc., the BankAmerica Corp. and NationsBank Corp. venture that competes with Microsoft and Intuit Inc. in money management software, stressed the need for bank branding and control of on-line services. But Mr. Harrison said he did not blame Microsoft or Intuit, maker of the Quicken package that leads the personal finance software field, for the way they are pursuing home banking relationships. "The threat is created by the banks themselves when they allow others to have access to their accounts," Mr. Harrison said. A. Christian Fredrick, senior vice president in charge of MasterCard International's MasterBanking program, saw red in Mr. Cone's Microsoft Money freebies. Underscoring the concern about banks' losing their identities, Mr. Fredrick said, is the fact that "it says 'Microsoft' 22 times on the Money for Windows box. ... That's why we wholeheartedly endorse the Meca approach." Brent Robinson, senior vice president of the Visa Interactive home banking and remote delivery unit, tweaked Mr. Cone by asking him to predict where he'll be working in a year. Mr. Cone has been at Microsoft for a year and a half and spent previous, relatively short stints at Meca Software and Prodigy Services Co.

*** The conference agenda, and most of the talking, tilted in favor of PCs rather than screen phones as the preferred in-home banking devices. But screen phone advocates managed to get a few licks in. Susan Vladeck, vice president of marketing for Philips Home Services, which has made a major commitment to the technology, said a few "big announcements" will soon make clear that screen phones are viable. Citibank is on that bandwagon, having been developing and testing screen phone programs with Philips for five years alongside its PC-based offerings. The New York bank currently leases the Philips phone for $9.95 a month and banking services are free. "It complements, not cannibalizes, PC banking," said Francis Liddy, a vice president at the Citicorp unit. "It's the perfect catalyst for banking at home because of the already large number of phones, and the utilization factor is much greater than with PCs," he said. "And then there is the female factor" - the fact that women, who tend to maintain household finances, are more comfortable with phones than PCs. "The screen phone is much more than an ATM in the home," can deliver "broadband, or value-added" services and "in the future may play a key role with electronic commerce and smart cards," Mr. Liddy said.

*** "The future of the screen phone may be too close to call, but there are some encouraging signs," said Charles Hieronymi, senior vice president of NationsBank Corp., which markets a $100 device made by Online Resources and Communications Corp., McLean, Va. "It's tough to sell a service when no one has the device - like selling software when there were no PCs," Mr. Hieronymi said. But NationsBank sees the screen phone as a logical step up from basic telephone banking and has found that users are more likely than others to be satisfied with their banking service and are less likely to close accounts, even when they move out of state.

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