Integrion Members Joining Rival Web Network
July 28, 1998
American Banker : As it nears its two-year anniversary in
September, Integrion Financial Network has yet to fulfill its original vision of becoming a
one-stop wholesaler of on- line banking systems.
The creation last year of MSFDC, a joint venture of Microsoft Corp. and First Data
Corp., has only served to confuse matters.
MSFDC's aggressive promotion of a bill presentment and payment system, including the
wooing of Integrion's member banks, has helped cast Integrion in the light of an on-line
alternative rather than the banks' main systems provider.
In the latest indicator of the Integrion consortium's vulnerability, one of its 17 owner
banks, Mellon Bank Corp., said last week that it would become an MSFDC pilot bank.
Mellon officials said the Denver-based joint venture offered a quicker entry into bill
presentment. It is planning to start a test with employees this summer.
"The MSFDC platform seems more mature and it offered us the easiest way to get
involved in bill presentment in the short term," said Dave Spier, manager of Internet and
PC banking at Mellon Bank.
Mellon has no plans to use Checkfree Corp.'s bill presentment service, which is being
promoted by Integrion, Mr. Spier said. But it said it would soon test Integrion for home
banking transactions.
Mellon joins other Integrion owners Norwest Corp. and KeyCorp as MSFDC testers.
Another Integrion owner, Banc One, has announced it will use the bill presentment
systems of both Checkfree and Integrion.
Besides pilot participants KeyCorp, Banc One, and Norwest, other Integrion owners
BankAmerica Corp. and Citicorp participate on MSFDC's advisory board.
Working with MSFDC exclusively are Wells Fargo & Co. and Merrill Lynch & Co. Last
week Wells became the first to present bills on its Web site using the MSFDC system in
a test with employees of the bank.
Merrill Lynch also participates indirectly with Integrion through its membership in Visa
Interactive, which Integrion purchased last summer.
Integrion chief executive officer William M. Fenimore said, "We haven't done a good job
in terms of telling Mellon Bank what we have to offer."
He said Banc One's expected rollout of Checkfree's bill presentment system "goes far
beyond a pilot of employees."
Mr. Fenimore acknowledged that the nature of electronic banking and payments has
forced Integrion to temper its "original premise, (which) was to avoid infrastructure
investment in middleware platforms and provide low- cost services through scale
operations.
"I would add that we are also becoming an aggressive integrator of application
providers such as Checkfree," Mr. Fenimore said.
Though Integrion would like to be serving more banks and customers, almost every
home banking provider is facing the predicament of "numbers that fall far short" of
expected customer adoption, he said.
"Integrion started out with the idea of providing a full suite of services," said Gary Craft,
an analyst with BancAmerica Robertson Stephens in San Francisco. "Now they are more
like a think tank than an executor of change in the banking industry."
Merely by existing, Integrion promotes change, Mr. Craft suggested. "The competition
between MSFDC and Checkfree is very good for banks, because these two 800-pound
gorillas are driving change," he said.
"Integrion's mission has evolved over time, and I don't think it is set in stone yet," said
Bill Burnham, senior research analyst at Credit Suisse First Boston in San Francisco.
"I wouldn't be surprised to see it move to the payment and switching model," Mr.
Burnham said. "They would be a giant document-switching network."
Even as its mission evolves, Integrion retains many of its original loyalists. PNC Bank
Corp.-Mellon's Pittsburgh rival-last month joined NationsBank Corp. and Banc One in
offering Web-based banking and bill payment via the Integrion network.
Other Integrion owners in pilot programs or expected to begin them soon include
Michigan National Corp., First Chicago NBD Corp., Washington Mutual Inc., and ABN
Amro.
"Right now we very much prefer to have Integrion provide the backend, " said Martin
Evancoe, vice president of on-line banking at PNC Bank. "We have not given up on
Integrion being the integrator."
Mr. Evancoe said Mellon Bank's use of MSFDC's bill presentment system "is going to
put a little pressure on Integrion" to develop a system that will allow bills presented
through one service to be paid through another.
"We need someone like Integrion to work with Checkfree, MSFDC, and Princeton
Telecom Corp.," he said, referring to three high-profile bill presentment providers. "It
can't be a Checkfree-only business."
Others working with both Integrion and MSFDC see no conflict in their dual alliances.
Billing services are just one element of what Integrion offers, said C. Webb Edwards,
chief technology officer of Norwest Corp. Whether Integrion or another provider
supplies Norwest's bill payment and presentment, it "won't impact our relationship with
Integrion," Mr. Edwards said.
Integrion recently beefed up its management, hiring George E. Palmer as chief
technology officer and J. Prescott "Scott" Wallace as chief marketing officer.
Mr. Palmer, 53, managed data center operations for two large companies. Before that he
spent 25 years at International Business Machines Corp.
Mr. Wallace, 45, came to the consortium from PNC Bank Corp.'s consumer marketing
division. He worked for 17 years as a consumer products executive at various companies
including Keebler Co., Kraft Foods, and Pepsico's Frito-Lay division. Copyright c 1998
American Banker, Inc. All Rights Reserved. americanbanker.com
By DREW CLARK
[Copyright 1998, American Banker] |
