Secure Network Banking!

It has been no secret that Microsoft has become the favourite flavour at the United States Department of Justice recently. Years of innovative technology, superb marketing, and stunning growth when combined with predatory practices and sharp dealing were bound to catch the attention of the arm of the US government responsible for ensuring that no one company is capable of arranging a supposedly free market to suit its own bank account.

Microsoft’s latest troubles made the front page of the Financial Times on 10 June and chronicled the problems that Microsoft is having extending its desktop domination into the world of on-line services. Louise Kehoe reported from San Francisco that Microsoft faces the prospects of having Windows95 that includes connectivity software for the Microsoft Network (MSN) blocked or delayed by another anti-trust investigation.

The regulators are asking Microsoft for clarification of the terms of licensing under which computer manufacturers pre-load Windows95 on new PCs. But once the DOJ starts snooping, who knows where their inquiries may end?

This recent potential show stopper is a big concern for businesses trying to plan a migration to Windows95. Not knowing what is in the final product causes complications! Microsoft plans to ship 10 to 20 million copies of Windows95 this year and another 50 million next year, according to some market watchers. The judicial hamstringing of the Microsoft Network will touch almost every business computer user world-wide.

Bundling Microsoft Network with Windows95 may not even be the smart thing to do. Microsoft is resolute that the Microsoft Network is integral with Windows95 and will not be sold separately. While this may provide a strong motivation for some to move from Windows 3.X or Windows for Workgroups, it also has the effect of blocking tens of millions of satisfied users on earlier Windows renditions from gaining the same access to Microsoft support resources and third party content providers.

By betting it all on W95 and the MSN, Microsoft has aroused the ire of the vested interests in the proprietary online provider market, lead by CompuServe, Prodigy and America On Line. And those vested interests have evidently found the right ears to whisper to in the Department of Justice rather more readily than did the application and operating systems software business.

Out of all the Microsoft Network muck, the Internet manages to stay clean. Although Internet connectivity of some description will be offered across the Microsoft Network (when, how much and how dear is not entirely clear), the Internet emerges as the only sure bet for business for 95. Once decried because it had no obvious owner, management structure and anti-commercial leanings, the Internet’s independence is now what really counts.

The Internet is not subject to the inquiries of anyone’s Justice Department, despite some recent American efforts to become the world’s Net cops for prurient content. Business requires free markets for best prospects and customers ultimately benefit from the open competition. The Internet delivers both today. Regardless of what happens to the hapless Microsoft Network or other proprietary on line organisations, the Internet will continue to grow and provide cost effective business communications across every national boundary on the planet. It’s pretty hard to create any serious competitive challenge to that!

An interesting pastime for the next year or so will be spotting the definitive Internet “killer app”, you know—that concept/product/service that will make all the preceding Information SuperHighway hype look like tentative under estimates of the Internet’s true potential. Clearly, one sterling qualification for killer app-hood is that it has to apply to almost everybody and make something that is inconvenient or expensive into something that is cheap and e-z to do.

I would suggest Internet banking as a likely candidate for the catalyst that could put the Internet on everyone’s breakfast table. I have done a portion of my banking online with Nat West for over five years, I was one of the pioneers to use Bankline. It has saved me considerable money by allowing me to see some of my accounts daily and move money when necessary to avoid bank charges and maximize interest.

However, I am less than happy that Bankline can’t embrace all of my accounts or carry out all the transactions that I want, that it costs a whopping tenner a month per account, that it updates at a leisurely 2400 baud and has a noddy interface left over from the good old DOS days. Bankline was conceived when a 386 was fast. Now we have Windows delivering better card games but sucking up Pentium mips to beat the band.


Despite some interesting toes in the water by Barclays hereabouts, it looks like the Yanks have beat us yet again. Three small banks that no one ever heard much about before will soon be offering services to customers through a bank-branded gateway to the Internet without invoking the backing of Microsoft or Intuit or any of the banking giants.

Area Bancshares of Owensboro, Kentucky, Huntington Bancshares of Columbus, Ohio, and Wachovia Corporation of Winston-Salem, North Carolina are setting up their virtual bank on the Internet called Security First Network Bank (SFNB). The presentation on their Web pages is impressive so far. But the proof of the pudding will of course be in the taste.

Area, Huntington and Wachovia will each own a slice of SFNB, which itself is a spinoff of Cardinal Bancshares of Lexington, Kentucky. The group has been beavering away for months to open an Internet bank. SFNB’s physical address will be in a small berg called Pineville, Kentucky and will have assets of $41 million when the green light shines. While their Web presence was rolled out last month, the next phase is to generate customers for their checking and bill paying facilities. You can’t sign up yet but they say Real Soon Now.

The bank is expected to operate like any home banking program which the Americans have been toying with for a few years now, only SFNBs’ will have more security. SFNB is acquiring WebTech of Atlanta, Georgia. WebTech is building the primary banking system that SFNB will be running in their “back office”. WebTech’s security architecture and software, called Virtual Bank Manager, also can be licensed by other banks.

Times moves quickly in cyberspace and the officials of the partners that created SFNB had to move as fast as a bank manager chasing a mile high cheque. The SFNB venture was finalized after only two months of discussion. Scarcely enough time for the British banking industry to agree on a venue for lunch.

SFNB will solve two major problems facing any bank that wants to take advantage of low cost and global Internet connections. Firstly, their WebTech system will allow SFNB and any licensee to control the product and the Internet gateway. By eliminating middlemen, the service can be offered at a very low price to the customer. Competition will be fierce between Internet banks and conventional banks, initially, and then between Internet banks themselves. Customers will enjoy a revolution in bank charges and, hopefully, responsiveness.

Secondly, the conglomeration of security technologies that make up the WebTech architecture, will give customers and business partners confidence in the safety of their money and the confidentiality of their transactions. WebTech uses RSA Data Security encryption, firewalls between inside offices and outside sources and a mature, reliable operating system platform to prevent security breeches.

The Internet commercial market is tumultuous, with many contenders vying for a stake in the future of on line financial services. The biggies, Visa International and Microsoft, have scarcely their usual advantages against the fast moving creativity of small operations like CyberCash, Digicash or the new CyberNet, recently founded by ex-ACT and Apricot boss Roger Foster. Foster’s experience in making a small company big in the financial software arena gives the home team a good chance to compete in a global marketplace.

SFNB may be ahead of the rest but non-US residents won’t be able to enjoy those services no matter how close they may be on the Internet. SFNB has advised that they will only open account for holders with a US address. The inate blindness of US businesses to the size and importance of rest of the world gives us all a chance ...before a reduction in prospects at home send the Yanks scurrying abroad for opportunities as they have in the past.

SFNB’s Internet home page is at http://www.sfnb.com