Home banking is set to go on-line America Online, Intuit announce plan for financial service

November 14, 1995|By Michael Dresser | Michael Dresser,SUN STAFF

Intuit Inc. announced a strategic alliance with America Online yesterday that could put "virtual bank branches" into 4 million American homes.

The alliance will combine the nation's largest computer on-line service with Intuit's Quicken financial network to provide electronic banking services to America Online's members.

By joining the leading brand names of financial software and on-line networks, the venture could give a significant boost to consumer acceptance of electronic banking.

"It's leading the way into banking as a personal service that can be done any way you want it done," said Ulric Weil, an analyst with Ferris Baker Watts. "The question is, will the dogs eat the dog food?"

Through the Quicken network, America Online members will be able to check banking and credit card account balances, print out account statements, transfer funds, pay bills and conduct other electronic transactions without leaving their homes, the chairmen of the two companies said yesterday.

Steve Case, chairman and chief executive of Vienna, Va.-based America Online, said the services will be wrapped into its current offerings at no extra cost to subscribers beyond those imposed by the banks. The two companies said the names of participating banks will be announced over the next few months.

The alliance is expected to be just the first in a series of collaborations, said Mr. Case and Scott Cook, Intuit's co-founder and chairman.

Asked whether America Online subscribers might soon be able to use Intuit's tax preparation software to file returns electronically, Intuit Executive Vice President Bill Harris said "it's a natural next step for us to discuss."

The companies said the electronic banking service will be launched for users of the Windows operating system in the first half of 1996 and for Apple Macintosh users by the end of next year. Customers will not have to buy Quicken software to use the system, and security will be provided through the use of personal identification numbers and strong encryption, the companies said.

Intuit, based in Menlo Park, Calif., already provides electronic banking services through the Internet's World Wide Web, but America Online will bring it far greater visibility and ease of access, along with a burgeoning base of already "wired" customers.

Over the past year, America Online's subscriber list has grown from 1.25 million to more than 4 million, bypassing CompuServe and Prodigy combined.

Intuit has already announced strategic partnerships with 21 financial institutions to offer electronic banking services. They include such well-known companies as American Express, Chemical Bank, First Interstate Bank, Chase Manhattan Bank, Wells Fargo Bank and Smith Barney.

Mr. Cook said it will be up to those institutions whether to participate in the America Online venture, but he expressed confidence that most would want to join. He said the agreement with America Online is non-exclusive.

Mr. Case said America Online did not expect to see any great increase in the amount of time subscribers spend on line as a result of the new service. He said the main advantage from his company's point of view was that it would help increase customers' loyalty.

"It's going to give America Online a chance to expand the breadth and depth of their financial services offerings," said Steve Eskenazi, an analyst for Alex. Brown & Sons.

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