Financial and Computer Giants unite on Internet Banking.

ATLANTA--(BUSINESS WIRE)--Dec. 4, 1995--A powerful mix of financial and computer industry giants has come together to support and promote the principles of open banking on the Internet.

Today at the Bank Administration Institute -- Retail Delivery Conference, the newly-established Open Banking Consortium announced a common vision to enable banks to maintain their customer relationships in an electronic age.

ALLTEL Information Services; Area Bancshares; Cardinal Bancshares; Five Paces, Inc.; Hewlett-Packard; Huntington Bancshares; Microsoft; Netscape; Prodigy; SecureWare, Inc.; Security First Network Bank, FSB; Servantis; Unisys; and Wachovia are urging all banks to consider five important questions before handing over customer accounts to a controlling intermediary.

-- Are we required to route our customers through a mandatory

switch?

-- Can we choose our financial partners (brokerage, insurance,

etc.)?

-- Can our customers reach the bank from any device, over any

channel?

-- Will we maintain brand independence and direct contact with

our customers?

-- Will we be able to maintain our traditional payment role in

the electronic payment system?

"The financial services industry cannot afford to let one or two powerful players become massive central processing hubs through which all on-line banking must flow," said Michael McChesney, chief executive officer of Five Paces.

McChesney added, "A closed banking system precludes competitive pricing from front-end processors."

The recent regulatory shifts are giving banks room to expand into non-bank financial instruments, selling products such as stocks, mutual funds, etc., often through third-party relationships.

"Open banking allows banks to choose those partners," said Ruann F. Ernst, general manager of Hewlett-Packard's Financial Services Business Unit. "In a closed banking system, those partners are chosen for you. The owner of the mandatory switch negotiates the deals, sets the prices, and takes a commission. The bank is left out of the loop."

Unisys Financial Services Line of Business Vice President Joseph F. Walton agrees.

"Customer retention in a rapidly changing financial marketplace is among the most critical issues facing banks," he said. "Brand independence and flexibility in using information resources to meet continually evolving client requirements are keys to retention success. Unisys believes the Open Banking Consortium provides a valuable framework to promote those key objectives."

Dan Frankel of Prodigy added, "Prodigy has long been a leader in helping banks customize their PC banking applications to meet the bank's requirements. We have always endorsed, and will continue to endorse the concept."

Another principle of the Open Banking Consortium is that customers should be able to reach the bank through any number of devices, or access networks and digital pathways. They should not be restricted to a single proprietary network.

"It is critical for banks to maintain control of their customer relationships as consumers shift to conducting more of their financial transactions via alternative delivery channels," said Collins Andrews, president of the Financial Services Division of ALLTEL.

"Future technology will allow customers to access their accounts in a variety of ways, and we think banks should be prepared to give them a variety of options."

Since the technical infrastructure that will be built for electronic banking is a natural first step toward an electronic payment system, the Open Banking Consortium members said banks should position themselves to play their traditional payment role in supporting the completion of electronic transactions over the networks of the future.

"E-cash, smart cards, and other payment systems being created by the Internet are causing further erosion of that control," said William Randle, senior vice president of marketing and strategic planning for Huntington Bancshares.

"We don't want to see a closed system becoming an electronic commerce clearinghouse, which can happen if banks hand over their customer account information," he concluded.

CONTACT: Creative Alliance, Louisville

Melanie Bullard, 502/566-0615

Ken Hoskins, 502/584-8787

or

Five Paces, Inc., Atlanta

Kim Humphreys, 404/315-6296