15 North American banks and IBM form company to offer electronic banking and commerce services.

NEW YORK--(BUSINESS WIRE)--September 9, 1996--

Integrion Financial Network represents banking industry's single

largest commitment to electronic banking and commerce

Fifteen of North America's leading banks and IBM today announced the formation of Integrion Financial Network. Beginning in early 1997, Integrion will offer a broad range of interactive banking and electronic commerce services to banks in the U.S. and Canada.

Representing over half the retail banking population in North America, over 60 million households, Integrion will be owned and operated by the member banks and IBM. This ownership structure enables banks to play a central role in determining the manner and format in which these services are offered to their customers, ensuring that electronic banking services are consistent with the bank's full range of services, are branded by the bank, and that the bank's customers receive maximum benefit.

This landmark alliance will help ensure that banks can rapidly deliver secure, convenient and reliable electronic banking services for the fast growing segment of the population expecting to participate in electronic commerce over the Internet and other electronic channels.

The Integrion alliance creates unprecedented opportunity for banks to develop industry standards for electronic commerce, to gain significant economies of scale and to offer levels of customer service in electronic banking unmatched in the industry today. In addition to IBM, the initial owners of Integrion include:

ABN AMRO  KeyCorp

BANC ONE Mellon Bank

Bank of America  Michigan National Bank 

Barnett Bank  NationsBank

Comerica PNC Bank

First Bank Systems Royal Bank of Canada 

First Chicago NBD  Washington Mutual, Inc.

Fleet Financial Group

Through Integrion, the banking industry will work with leading technology providers to establish open standards for electronic commerce that will speed banks' ability to deliver a wider range of integrated products and services at lower costs.

The Integrion Financial Network will be an independent, for-profit limited liability company charged with developing and offering industry leading electronic commerce solutions for the banking community. Integrion will have the freedom to move swiftly in its mission to create the "best of breed" capabilities with a broad range of potential providers and partners in financial services and technology.

Rationale for banks

Banks wanting to offer their customer access to their services through the public Internet still face significant security issues around transmitting payments and other sensitive private information over this channel. Integrion helps to solve this by providing both public Internet access and parallel private network access, and addressing security and privacy issues in interactive banking. This represents a significant breakthrough in customer-focused electronic commerce.

Banks can let their customers choose whatever personal financial management software or Internet browser programs they want to use. Integrion has created an open infrastructure that is intended to accommodate front-end customer software like Microsoft Money, Quicken and Managing Your Money, and Internet browsers like Netscape Navigator and Microsoft Explorer. Access will be available to consumers via the Internet, through online services such as Prodigy, America Online and CompuServe, via the IBM Global Network as well as via the telephone.

By sharing Integrion's development, marketing and operating costs, banks avoid duplication of the same basic infrastructure. They also take advantage of economies of scale by pooling their volume. The Integrion owner banks serve over half of the U.S. and Canadian households, clearly putting this new company in an outstanding position to gain scale quickly.

In building its service offerings, Integrion focuses on allowing banks maximum opportunity for branding and for customizing the "look and feel" of interactive banking to their end-customers. As a result, Integrion enables banks to concentrate on serving their customers instead of developing additional technology.

Integrion welcomes any bank as a customer and makes no distinction between owner banks and additional customer banks in its fee structure and other important service dimensions. With the commitment of major banks and IBM behind it, Integrion expects to be able to provide better services faster and cheaper than third-party providers or a homegrown effort of any single bank. This will have a positive influence on the value available to customers.

Benefits for customers

Customers will gain the most benefit from Integrion. They will be able to bank directly with the financial institution they have chosen, via the access method of their choice. Bank customers will be able to access these services using a Web browser by connecting directly to their bank over the secure IBM Global Network, or by connecting through the Internet using secure firewall an encryption solutions. Customers also will be able to access bank services through the personal financial management software of their choice or through touch-tone phone. Eventually, customers may be able to access the services through interactive television and kiosks, as the market for these devices develops. Internet users will benefit by having a way to send the most sensitive data over a secure and private network that already carries millions of payments today.

By helping to set standards, Integrion will appeal to technology and service innovations from a wide range of providers, broadening the service offerings for customers. Initially consumers will be able to execute, in a secure way, all the core banking transactions like balance inquiries, fund transfers, electronic bill payment, and to send e-mail to their banks.

Future enhancements may include securities trading and stock quotes, access to mutual funds, applications for loans, and the ability for customers to receive bills electronically. Eventually the services will extend to electronic cash and smart cards, sophisticated risk and information services, and interactive video sessions.

Rollout

Technology development is well under way, with the two initial pilots slated for launch by BANC ONE and NationsBank in early 1997. Additional partner banks will roll out Integrion-based services later in 1997, with other customer banks to follow.

Common network infrastructure

This unprecedented range of electronic commerce services is made possible by the common network infrastructure that uses open Internet-based standards and computing technologies. The network infrastructure provides a secure, high-performance, reliable transaction processing platform to enable electronic access between banks and their individual and small business customers. The IBM Global Network, which already securely handles a large volume of electronic payment transactions, will support the infrastructure, providing a safe, accurate and non-proprietary delivery channel.

Outside perspective

"We expect the number of U.S. home banking users to grow 75% annually until the year 2000. To handle this demand, U.S. commercial banks may be forced to grow their home banking expenditures to over $1 billion by 2000," said Deogo Teixeira, President, The Tower Group. "But banks can help control cost growth by providing a shared infrastructure and transaction standards. New features such as bill payment or bill presentment have significant economies of scale are already disaggregating. By owning Integrion, these major banks are moving to retain control of this important new channel, allow access from all customer devices and ensure bank branding of new service."

CONTACT: ABN AMRO -- Jim Delillo -- 312-904-2714

or

BANC ONE -- John Russell -- 614-248-5989

or

Bank of America -- Bob Wynn -- 415-953-3836

or

Barnett Banks -- Gerri Frons -- 904-791-5455

or

Comerica -- Sharon McMurray -- 313-222-4881

or

First Chicago NBD -- Tom Kelly -- 312-732-7007

or

Fleet Financial Group -- James Mahoney -- 617-346-5472

or

IBM -- Ian Colley -- 914-642-6219

or

KeyCorp -- John Fuller -- 216-689-8140

or

Michigan National Bank -- April Jurnigan -- 810-473-3000

or

NationsBank -- Mary-Alice Rogers -- 704-386-0261

or

Royal Bank of Canada -- Dan Maceluch -- 416-974-5506

or

Washington Mutual -- Bill Ehrlich -- 206-461-2204