An Idea Takes off as the Big Boys Embrace It
Kutler, Jeffrey, American Banker
It sounds for all the world as if the long-anticipated explosion of home banking is under way. But sounds, of course, can be deceiving.
To be sure, banking from an electronic device in the home - or from other remote, nontraditional locations - has become one of the industry's hot topics.
Even chief executive officers have shed their historical apathy on such matters; some have become vocal and enthusiastic advocates of the new approaches to customers broadly defined as alternative delivery systems.
If the CEOs have gotten with the program, can there be any doubt a revolution has begun that will ensure a place for their institutions on the vaunted information highway?
In fact, doubts persist, and on multiple levels.
Aside from the still-nagging questions about the ratio of hype to reality on home banking and other interactive consumer services, many observers wonder whether bankers have the strategy and fortitude needed to play a part - or even to preserve a role for themselves - in an electronic setting very different from the business venues to which they are accustomed.
In an unusual burst of entrepreneurial energy, top retail bankers and their technology experts are jockeying for on-line positions against both traditional and nontraditional competitors. Their services, ranging from basic telephone inquiries to direct personal computer connections to electronic commerce on the Internet, have helped to magnify the buzz emanating from the likes of Microsoft Corp., AT&T Co., Time Warner, Viacom, and Sony.
But like these and other corporate giants, who each claim to have a certain fix on where the world is headed, bank executives seem more inclined to debate technical and strategic alternatives than to coalesce around some coherent vision of the future.
Which seems only natural for that world aborning known as cyberspace, where chaos seems to be the norm, and where, according to Time Warner chairman Gerald Levin, "all forms of communication are possible - the good, the bad, and the unpredictable."
To call the recent flurries of activity mind-boggling or perplexing would be an understatement. Technology is advancing, products are being announced, strategic alliances are being formed, and old paradigms are being shattered at breakneck speed, creating uncertainty for business planners at every turn.
The good news for confused bankers may be that no one can keep pace with it all. The playing field may not be the level one that bankers fought for in their regulated markets over the last two decades, but all participants - fearsome Microsoft and humble community bank alike are embarking on the interactive adventure from essentially the same starting line.
It might not even be a bad idea to wait a while before acting, indulging some old-fashioned bankerly conservatism in the interest of letting the pioneers take the proverbial arrows in the back.
But that raises questions about controlling one's destiny - and these seem to have acquired greater urgency than ever, largely due to technology.
Three jolts within seven days in May typified the business upheaval from which no financial institution can be insulated:
* MCI Communications Corp. entered into an alliance with News Corporation Ltd., including a potential $2 billion investment by the global telecommunications and transaction-processing behemoth in Rupert Murdoch's burgeoning media empire.
* Microsoft and the NBC television network announced a similar alliance. Without being specific about dollars changing hands, they said they intend to marry the General Electric subsidiary's "content" with Microsoft software and on-line network programs.
* BankAmerica Corp. and NationsBank Corp. got together and agreed to buy Meca Financial Software, a competitor of Microsoft in the personal financial software market.
If the Meca deal, for $35 million, seems out of the MCI or Microsoft league, think again. …