Armchair Banking and Investing

Financial institutions rush to provide home services

The ad was a grabber: "Futuristic way of living arrives in South Florida... Bank at midnight from your living room." When Physician Alfred Damus of Coral Gables, Fla., ran across the announcement one day last week in the morning paper, his imagination went to work. With a system called Viewtron, the doctor and his wife Leatrice could monitor their bank accounts, pay bills, keep track of their stock portfolio and perform other financial tasks simply by tapping the buttons on a notebook-size keyboard. Later that morning his wife spent $600 for the Viewtron machine being advertised at a nearby Burdines department store.

Seven years and $26 million in the making, Viewtron made its debut in southeastern Florida last week as the first two-way home information system available in the U.S. The Knight-Ridder newspaper chain, operator of Viewtron, plans to introduce the system within about two years in 17 cities, including Boston, Detroit and Seattle. One of Viewtron's starring attractions, banking at home, presages a revolution in consumer finance. A sci-fi concept only five years ago, home banking is now being introduced by institutions ranging from New York City's Chemical Bank (deposits: $29.8 billion) to Washington, D.C.'s Madison National ($178 million). The biggest firms in U.S. banking, New York's Citibank and San Francisco's Bank of America, are also testing such programs.

A survey of major banks by the Direct Marketing Association showed that one-third plan to offer the service by 1990. William Wyman, who directed a study of home information systems for the consulting firm Booz Allen & Hamilton, estimates that in 1995, the home banking industry will have revenues of as much as $2.6 billion. Bankers plan to market the home tellers as a way for average depositors to liberate themselves from such hassles as long lobby lines and 3 p.m. closing times.

Chemical Bank last month began advertising its new Pronto system. With a TV set, an Atari 400 home computer (cost: about $60) and a modem ($75) to connect the terminal via a telephone line to the bank's computers, Pronto will do nearly every banking chore except dispense cash. Patrons can check their balances 24 hours a day, transfer money from one account to another, keep records on five separate budgets for such expenses as travel or household bills, and pay bills to about 350 companies ranging from Bloomingdale's to American Express. If the customers have any questions, they can send messages to Chemical staffers, who will answer the question within a day. The monthly service charge: $12.