Home Banking Takes a Major Step Forward : Technology: Alliance of 20 banks and Intuit will link computer users to financial services starting this fall.

Forging a broad alliance aimed at bringing electronic banking to the masses, 20 of the nation’s largest banks and the leading publisher of personal finance software plan to announce today that they will offer customers the ability to pay bills and perform other financial tasks via their home computers starting this fall.

Intuit Inc., whose popular Quicken software is used by 6 million Americans to keep track of their checks and balances, plans to offer a new version of the product that will link users to one of the participating financial institutions with the click of a mouse.

The banks and financial institutions expected to participate include American Express, Citibank, Chemical Bank, Chase Manhattan Bank, First Interstate Bank, Sanwa Bank California and Wells Fargo.

Intuit officials did not return calls for comment.

The alliance is the largest yet to promote the convergence of banking, software and cyberspace--but other companies are racing ahead too. Microsoft Corp., whose planned merger with Intuit was called off earlier this year after the Justice Department raised antitrust concerns, has announced a similar arrangement with 14 financial institutions to be launched with the next edition of its Microsoft Money software, also due out this fall. Many major banks are working with both Intuit and Microsoft.

BankAmerica Corp. the nation’s second-largest banking firm, is pursuing next-generation home banking via its recent purchase, together with NationsBank Corp., of Meca Software Inc., another major publisher of personal finance software.

Banks had been proceeding relatively slowly in the on-line arena because of concerns about security, the failure of some earlier home banking projects and the risk of losing contact with customers. But with the number of home computers in the United States at more than 30 million, bankers have found themselves facing growing competition from computer firms determined to provide on-line financial services--and collect the lucrative fees from handling consumers’ money.

In recent months, banks have been seeking ways to get involved in “brick and mortarless” banking.

“I think you will see the change in banking over the next five years will surpass the changes over the last 25 years,” said Gene Galloway, executive vice president at Sanwa Bank, who sees on-line banking as a way to compete with larger banks on a more level playing field.

Under the Intuit plan, every home will become a virtual bank branch. Customers will click on an icon of a particular bank and immediately be able to access their statement. A check made out on the computer screen will be sent over phone lines to Intuit’s banking hub in Chicago, and the funds will either be transferred electronically or a paper check will be sent to the payee.

For consumers, electronic banking offers more up-to-date information, more convenient bill-paying, more control over their money and fewer trips to the bank. Indeed, while electronic banking is now limited to less than 1% of bank customers, analysts say it may eventually eliminate the need for branches entirely. The new alliance is a big step in that direction.

“All the banks are excited about banking over the Internet, but this is the first time we’ve seen an endorsement by so many significant banks, which is a bigger step than we’ve seen in the past,” said Rick Spence, an on-line services analyst at Dataquest.

Still, analysts say that persistent concerns about the security of sending private financial information over phone lines may turn people away from cyber-banking. And the inherently personal nature of handling one’s money may mean face-to-face banking will always have a place.

“I think it’s pretty clear that electronic banking is taking off,” says Steve Didion, banking analyst at Hoefer & Arnett, a San Francisco investment brokerage firm. “But when they’re taking out a loan, people still like to meet somebody who will walk them through the process. People still like to go into the bank.”