Since the early 1980s banks have tried and failed and tried again to convince customers to use home computers for transactions.

This time around, it looks like they will succeed.

Computer industry and financial services insiders say the powerful confluence of an explosion in personal computer ownership, rapid acceptance of on-line services, and mass marketing of personal money management software will make PC banking popular.

The latest service, set to begin this fall in Buffalo and around the country, teams major banks and financial services companies with the manufacturers of the two most popular personal finance software packages, Quicken and Microsoft Money.

Institutions in Buffalo offering the home banking service will include M&T Bank, Chase Manhattan Bank, Smith Barney and American Express.

Chase Manhattan has been offering PC banking for a year through a previous version of Microsoft Money's home banking program, and has signed up 10,000 users. Citibank has had success offering home banking through a proprietary program.

"I think a lot of the interest can be attributed to the sales surge in home PCs with built-in modems that occurred back in December," said Paul Morris, an executive with Citigold, a Citibank program for executives and professionals.

The alliance of financial services providers with personal finance software manufacturers also creates a major opportunity, said Richard S. Gold, vice president for deposits and investments at M&T.

"There are something like 9 million users of this personal financial software, and that gives us a ready market," he said.

That market is expected to expand this month as Intuit Inc. releases an enhanced "Quicken for 96" program. Quicken is the most popular personal finance software package with about eight million users.

Microsoft Money, second-most popular with 1 million users, already is offering its "Money for Windows 95" program, which significantly expands the capabilities of the program.

Although the new banking services include many of the same functions offered in the failed PC banking experiments of the 1980s, they will be easier to use, cheaper and have many more features.

Previous generation on-line banking cost $8 to $20 a month in order to use private-label software with few features.

The new service will cost $3 or less per month, depending on the customer's account relationship, and allow users to combine bank and brokerage account information with budgeting, tax planning and report features of Quicken and Microsoft Money.

The initial services will include balance inquiries, bill payments, the transfer of funds between accounts, the ability to download statement and transaction details, two-way communication with the bank through E-mail, and product marketing by the financial institution, said Bruce Burchfield, president of Intuit Services Corp.

Eventually, users will be able to make loan applications through their PCs and have the applications approved on-line, he added.

The on-line service has the capability of replacing a bank branch or brokerage office for some customers, although industry executives say that is not their aim.

"The idea here is to give customers as many options as possible for how they want to bank with us," Gold said.

PC banking is just one of several M&T initiatives to broaden availability of its services, he added. For instance, the bank soon will introduce a touch-tone telephone bill-payment service that will eliminate the need to write checks.

It means 24-hour banking

Banks like M&T and Chase Manhattan are using PC banking as one piece of a 24-hour, seven-day virtual bank.

Chase markets its PC banking as part of a program called "Chase Direct." Customers who maintain required minimum balances in this relationship account pay no fees to use PCs, electronic mail, telephones, faxes and the mail to do business with the bank, says Mark Burns, vice president of on-line services.

Smith Barney, which is offering the PC service on its Financial Management Account, wants to help clients simplify their lives by combining all of their financial dealings into one account that is easily accessible, said Jay Mandelbaum, an executive vice president at the brokerage.

However, the firm believes clients will want to continue dealing with their Smith Barney financial consultants, he said.

"People still want the help of an individual to bounce ideas off of and to get advice from," he said. "We view this as something that will enhance our relationship, but people still want a trusted financial consultant."

What they don't want is to hassle with details eliminated by the home banking services, financial services executives say.

Users will be able to pay bills by punching a few buttons on their keyboards, then reconcile their checking accounts by hitting a few more buttons. They can get stock and mutual fund quotes to update their investment accounts, and create instant reports on assets, payments, budgeting, net worth, taxes and other subjects.

Widespread acceptance

Financial services providers are finding that PC banking appeals to a wider variety of customers than originally expected.

In the 1980s, when Chase introduced a proprietary PC banking program named Spectrum, it was used primarily by men, Burns says.

Since it introduced the Microsoft Money home banking program a year ago, Chase's customers are split almost evenly between men and women. Chase had expected PC banking to appeal to younger, more technically oriented customers, but instead has found strong acceptance among customers in their 40s and 50s, he said.

Citibank had a similar experience, said Lisa Barrett, regional branch director for Citibank in Buffalo.

"We were very surprised when some of older folks who we presumed weren't as consumer savvy as younger customers were very interested in it," she said.

There are some characteristics users share, Burns said.

"They tend to be highly satisfied customers who consolidate their relationships at one institution for convenience sake," he said. "They want to minimize the amount of time spent on their finances, and they tend to have a need to have a greater sense of control over their money."

Electronic bill paying is the biggest draw for users because it saves postage costs and lots of time, says Citibank's Barrett.

Financial institutions are excited about the prospects for the latest versions of PC banking.

Chase has signed up 10,000 customers for its Microsoft Money banking program since last October; from 1985 through last year its highest participation in the proprietary Spectrum program was only 4,000. Once Quicken releases its new software, the bank expects its usage to grow rapidly, Burns said.

Word is spreading

M&T has not begun marketing PC banking but is getting telephone calls daily from customers who have heard the bank has linked with Intuit and Microsoft, said Richard A. Rozbicki, electronic banking manager. Smith Barney is getting a similar response from its customers, Mandelbaum said.

Citibank rolled its service out in the spring and has done little advertising, yet it has signed up several thousand consumers and 300 businesses. "But downstate they are signing up 30,000 a month, so you can see we still have a long way to go here," Barrett said.

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