March 27, 1997 1:15 PM ET
Microsoft ending cold war with banking community
By Jim Kerstetter

  Microsoft Corp. is getting increasingly cozy with the home banking community.

At a gathering yesterday of more than 400 banks, brokerages and software providers, Microsoft officials said the company would eliminate the fees it charges to financial institutions for use of Microsoft Money personal financial software.

The announcement was part of a larger bridge-building campaign by the Redmond, Wash., software company, which has spent the better part of the last year repairing a rift with banks. Executives from financial institutions had expressed unease about software companies getting in the way of their relationships with customers. The distrust peaked in 1995 when Bill Gates dubbed banks "dinosaurs."

But Microsoft made an about-face early last year, announcing the Open Financial Connectivity specification that would standardize integration with a bank's financial systems, and then OFX (Open Financial Exchange), a proposed standard for home banking on the Internet.

Now Gates and company are taking another step into the background.

In the past, Microsoft, like financial software rival Intuit Inc., charged banks a fee for connecting their back-end systems to customers using Money. With the elimination of the service fee, more banks will be able to offer free connectivity to Money users. Money will support the OFX specification by this fall.

That's not to say that Microsoft is getting out of the business of a bank's back end.

Also at the Microsoft Internet Banking and Brokerage Conference, Microsoft previewed a Web development platform code-named Marble. The platform will provide an OFX gateway and scripting tools to allow developers to link legacy systems and connect to third-party service providers, such as Checkfree Corp.'s bill payment service.

Marble also will include a server component designed to handle online bill payment and statement updates and will use 128-bit encryption. Microsoft officials said users will be able to customize Marble's browser components using Java, Active X, Visual Basic or Visual C++. It will also come with customized HTML templates.

Marble is expected to be available in the fall, but pricing hasn't been determined. Microsoft officials promise two more conferences this summer to detail plans on the platform.

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