FOCUS-Integrion scales back board, gets capital
(adds comment from analysts, Integrion officials, background in paragraphs 5 through 13)
NEW YORK, April 6 (Reuters) - Integrion Financial Network, formed by several U.S. banks and computer giant International Business Machines Corp. (NYSE:IBM - news) to provide technology for electronic banking services, said on Tuesday it would change its organization and get a fresh injection of capital.
Integrion said under the new structure, most of the banks that previously governed the network would scale back their stakes, as would IBM and credit card association Visa U.S.A.
They will also chip in less of the new capital the network will use to support its technology platform, which helps connect banks' internal computer systems with customers' computers, telephones and other access points.
KeyCorp (NYSE:KEY - news) and Royal Bank of Canada (Toronto:RY.TO - news) were pulling out of Integrion altogether, the network said.
''It reflects the fragility of the alliance,'' Albert Pang, an electronic commerce analyst at International Data Corp said. ''I think this is a strategic move on the part of the banks not to get too involved in the future development of the consortium but maintain a working relationship with it.''
Some of the banks might prefer to develop electronic banking independently, or would rather not pay so much money to Integrion, Pang added. Integrion's situation is similar to that of Visa, which recently saw dissension in its member bank ranks over credit card marketing issues.
Integrion did not reveal the amount of new capital it was receiving but said it was sufficient to meet its needs for the foreseeable future. Its chief executive, William Fenimore Jr. said the capital was less than the $80 million raised when Integrion was formed, but it was adequate.
Integrion said three banks - BankAmerica Corp. (NYSE:BAC - news) Bank One Corp. (NYSE:ONE - news) and Washington Mutual Inc. (NYSE:WM - news) - would govern the network. The three, which currently use Integrion's technology platform, will also contribute a greater proportion of the new capital, it said.
Other owners who previously had a bigger interest, like Citibank, (NYSE:C - news) First Union Corp., (NYSE:FTU - news) Fleet Financial Group Inc., (NYSE:FLT - news), PNC Bank Corp. (NYSE:PNC - news) and Wells Fargo and Co. (NYSE:WFC - news) now would sit on a strategic advisory council.
''It had been a clear example of too many cooks in the kitchen,'' Pang said.
Integrion, formed in December 1996, said it would use the capital to support and develop applications for its technological platform, which includes interactive banking, bill payment and bill presentment.
The founding owners' original intention was for Integrion to be controlled by its customers, the network said.
''The new governance structure was designed specifically to be more flexible and responsive to the needs of our customer banks in a highly dynamic and emerging environment,'' Fenimore said.
Integrion also said it expected several banks to join the board and its customer base in 1999. Other banks now using its platform are PNC, ABN AMRO Holding NV and Michigan National Corp. (Nasdaq:MNCO - news).
Integrion would continue to team up with technology partners like IBM and CheckFree Corp. (Nasdaq:CKFR - news) applications on its platform. Last month, it started rolling out integrated electronic banking, bill payment and presentment.
more detailed article via american banker:
Message 8725526 |
