After trunding along in fits and starts since the 1980s' home banking is finally beginning to be defined.
Fast becoming a misnomer, "home banking" is increasingly being referred to as "remote banking" and "interactive financial service" to reflect a broad array of information and applications that wil be delivered to consumers-in their homes offices or wherever else they may be.
A flurry of activity is taking place among banks and an array of potential partners, all jockeying for position. The consensus in the industry is that the service, by any name, is back, and this time it's here to stay.
Telephone banking, by far the most prevalent channel for delivery of services to the home, has been around since the 1970s.
Banking by personal computer came along a decade later, and has been ofered by large and small institutions. But the service failed miserably. Banks sank millions into projects and never got many subscribers.
Tower Group, a technology research and consulting firm based in Wellesley, Mass., reports that overall, from its start in 1980, there have never been more than 150,000 subscribers to banks' PC home banking services in the United States.
Today the financial industry feels the time is finally right, for a number of rasons.
"There's an ever-increasing consumer demand for convenience", said Neal Chambliss, vice president of Payment Systems Inc., a market research firms specializing in financial services, based in Tampa, Fla.
Technology-savvy consumers, accustomed to automated teller machines and point of sale terminals, are ready for the service, he said.
Many Modes of Delivery
What's more, the technology itself has advanced. Today, there are a variety of delivery methods, including touch-tone phones, PCs, screen phones, interactive television, and in the futur, personal digital assistants and other personal communications products.
Banks are now more willing to offer home banking services because there are plenty of other kinds of companies eager to enter the picture because of the major profit potntial they see in remote banking. Banks know that if they don't provide the service, someone else will. Many companies, however, are forming partnerships with banks to deliver home banking services.
These alliances represent a significant difference between the services of old and those being developed today, and are helping to drive the industry, say many experts,
"In the past, there were proprietary efforts by banks," said Glenn Santmire, senior vice president of remote banking for MasterCard International, U.S. region. "But banks couldn't afford to offer the service alone, because they couldn't generate economies of scale."
Today, banks partnering with third parties can enter the market without a significant investment in technology, and can share the cost of maintainin a network, he said.
All of these factors are beginning to cloalesce, say industry experts, so that the creation of remote banking services is becoming a 'cross-industry effort'" one that's very complex.
Banks are faced with a number of important decisions. For one thing, no one is sure which device or devices will ultimately succeed. Also, financial institutions are being courted by a number of companies and alliances of companies eager to become their partners. Choosing the right partner can make the difference between success and failure in any home banking venture.
Some of the companies that want to team up the banks to offer remote banking include the regional Bell operating companies, credit and debit card issuers, regional electronic funds transfer networks, data processors, bill payment service providers, equipment and software vendors, and on-line service providers.
The rational behind forming alliances is good from either perspective, said MasterCard's Mr. …