IBM (IBM) and 15 of North America's largest banks today announced Integrion Financial Network, a company created to bring online banking to consumers.
Integrion will use IBM's Global Network, its worldwide private network, as the backbone for making secure transactions.
But consumers will be able to pay bills, transfer funds between accounts, and conduct other transactions by tapping in to their bank via the Internet, proprietary online services such as America Online, standard phone lines, or IBM's network. Initially, they may log on to their banks using a touch-tone phone or personal computer. In the future, Integrion also will support users of pagers, kiosks, interactive TVs, and other Internet devices.
"With this new venture, electronic commerce makes its biggest step forward to date," IBM Chairman and CEO Lou Gerstner Jr. said today at a New York press conference, which included senior executives of the owner-banks of the new company. "Integrion is a secure, networked marketplace that is essential to the growth of electronic business."
Robert Gillespie, president and CEO of KeyCorp, emphasized security. "Member companies are committing to build a network that customers can trust and rely on for security and confidentiality, something that has been sorely lacking on Internet," Gillespie said.
Two institutions, Banc One and NationsBank, will conduct pilot tests of online financial services in early 1997, with more banks coming online later in the year.
A key element of Integrion's strategy is to allow participating banks to brand financial services under their own names, rather than going through a software company such as Intuit. Gerstner said Integrion hopes Intuit, whose personal finance software Quicken dominates the PC market, will produce a version for Integrion users, although Integrion too expects to develop its own bill-paying software for consumers.
Integrion intends to sign up other banks to use its infrastructure and technology, and executives emphasized that the company would charge the same fees for owner-banks and other customers.
Integrion also will support existing Internet standards as well as publish application programming interfaces for its software so that banks, providers of other financial services, and software companies can use the network to deliver other services.
Other banks participating in Integrion are Bank of America, Barnett Banks, ABN Amro, Comerica, First Bank Systems, First Chicago NBD, Fleet Financial Group, Mellon Bank Michigan National Bank, PNC Bank, Royal Bank of Canada, and Washington Mutual.
Each partner has put "several million dollars" into the new entity, which is a separate company with it own board of directors, the bankers said. The initial funding exceeds $32 million.
But the list excludes Wells Fargo, one bank that has been most aggressive in moving onto the Internet.
For IBM, the alliance advances its strategy of focusing on specific industries where it has existing customers. IBM's Internet Division develops technology and products that can be customized and marketed to industry segments such as wholesale distribution, health care, retail, energy, transportation, and consumer finance.