IBM, BANKS LAUNCH FIRM TO SET ON-LINE STANDARDS.

Byline: Patricia Lamiell Associated Press

IBM and 15 banks that claim as customers more than half the households in North America on Monday launched a company that aims to set the standard for services like on-line check writing and money transfers.

The new company, called Integrion Financial Network, will offer on-line services similar to those already available through software such as Intuit Corp.'s Quicken and Microsoft Corp.'s Money.

But IBM hopes the venture will attract new banks to the on-line world by giving even the smallest of them a network through which their customers can talk to them, and an industry standard by which they can communicate.

The new network will allow banks, including the Bank of America, to brand their own on-line products on the screen.

Customers will be able to use it to check their bank balances, write checks, transfer funds and send e-mail to their banks. Eventually, they may be able to trade securities and get stock quotes, get access to their mutual funds and apply for loans.

Integrion represents banks' latest effort at staying at the top of the banking services business, which has been encroached on in recent years by nonbank companies. Bankers were rankled when Microsoft Chairman Bill Gates in late 1994 declared their institutions were dinosaurs. Gates has since tried to dispel the notion that his company will try to steal banks' customers.

Nonetheless, one indication that the industry was still smarting from Gates' remark came in a reference to it by Robert Gillespie, president and chief executive of Cleveland-based KeyCorp at the Integrion news conference.

``If we be dinosaurs as some have said . . . I would suggest today we're putting our competitors on notice that it's a new breed that's evolving,'' Gillespie said.

Intuit and Microsoft, and a third provider of banking software, MECA Corp., say they will some day offer sophisticated banking, bill-paying and financial planning services to residential customers. They envision, for example, that a customer will some day use a home computer to download ``electronic money'' into so-called ``smart cards.''

But that day is years away. Last year, only 1 percent of all banking transactions were conducted on line, according to the American Bankers Association.

International Business Machines Corp. tried to set itself apart from the strategies of Intuit and Microsoft by giving member banks more control over the product. Integrion will let the banks plaster their names on the service, in contrast to existing mass-market financial programs, which emphasize the software developers.

``We're a partner, not a competitor,'' said Louis Gerstner Jr., the chairman of IBM.

In an interview, KeyCorp's Gillespie offered a hypothetical example of how a bank customer might use Integrion in the future. Someone not familiar with KeyCorp - maybe a Bank of America customer on the West Coast - shops for a boat on the Internet and after reviewing the specifications of several models on line, decides on one.

At the bottom of the boat vendor's Web site flashes a message informing him that KeyCorp offers special boat-financing products. For more information, the boat buyer can contact KeyCorp through Integrion.

Integrion's bank partners include big institutions like BancOne, Bank of America, NationsBank and the Royal Bank of Canada.

Other banks in the venture are ABN AMRO, Barnett Bank, Comerica, First Bank Systems, First Chicago NBD, Fleet Financial Group, KeyCorp, Mellon Bank, Michigan National Bank, PNC Bank and Washington Mutual Services Bank.

But the services that Integrion develops will be open to all banks. Charges will not differ for banks that haven't bankrolled the service but join later.

The banks will reach their customers via their own on-line home page, which will be accessible through the Internet's World Wide Web and other on-line services, such as America Online, CompuServe and Prodigy.

IBM's global data network, typically used by large companies to supplement their internal data networks, will also be an option to deliver services.

Banks will be able to decide whether their customers can integrate their financial programs, such as Quicken or Money, into the on-line services. In some cases, the banking services will be available simply with Web browsing software.

Participating banks will make money by charging transaction fees for carrying out tasks on line. IBM will make money by selling services and integrating various software programs and computer systems for Integrion.

IBM and the member banks hope other companies will write software and create new computer products that will be compatible with Integrion. It hopes Integrion as the standard for which other products are created.

``The parties have every interest in seeing a wide range of applications brought to this network,'' Gerstner said.

Two initial pilots are slated for launch by BancOne and NationsBank in early 1997.

Integrion's board will be comprised of executives from the banks. A search for a chief executive is under way.

CAPTION(S):

Photo

Photo: (color) Banking leaders gather for the introductionof the Integrion Financial Network in New York on Monday.

Associated Press