Financial Times, October 30, 1995, p. 13. Online bank era dawns By Louise Kehoe The Security First Network Bank established by Cardinal Bancshares -- a small Kentucky savings and loan institution is the first financial institution to conduct true online banking over the Internet. SFNB's pioneering effort may influence the growth of Internet banking. Larger financial institutions are watching for clues as to how consumers respond and to see whether the cyberbank can live up to its "Security First" name. Concerns about Internet security exacerbated by incidents in which supposedly secure software has proven vulnerable -- have made banks cautious. SFNB claims to have created a "virtual vault" for each customer account, using a "trusted" computer operating system from Hewlett-Packard the second largest US computer company, as well as encryption and user authentification software, and firewalls. "We have overcome the problem that has prevented banks from transacting over the Internet," said James Mahan, SFNB's chairman. Perhaps cyberbanking's biggest draw is that the SFNB is open 24 hours a day, seven days a week. Customers will be able to conduct standard personal banking tasks such as paying bills, transferring funds from one account to another and checking the balance of an account. Nor are there queues at the counters in the "virtual lobby" of the SFNB which are staffed by computer renditions of R2D2-style robots (http://www.sfnb.com). But waiting for images to download from the Internet over a modem may persuade users that a bus trip to their local bank is not such a bad idea. SFNB also faces competition from more than 20 US banks including Chemical Bank, Wells Fargo and First Interstate that have formed partnerships with Intuit, the leading personal finance software company, to enable users of the popular Quicken program to access information from their accounts and pay bills electronically. Services offering stock prices, information about mortgages, loans and retirement funds as well as insurance are flourishing. Some of the most innovative include BankAmerica's new Web site which opened a week ago with an invitation to users to "build your own bank". By filling in a form, users can tailor the information presented to fit their interests. A student, for example, might be presented with information about obtaining loans for college fees. Someone close to retirement age would automatically be routed to information more relevant to his interests. One of the largest mortgage lenders in the US, Bank of America, has also chosen to put an emphasis on property purchases at its Web site. Hyperlinks to real estate firms throughout the US enable users to search through lists of homes for sale and then to link back to the bank in order to apply for financing (http://www.bankamerica.com). Among the biggest attractions of the Internet for consumers, including consumers of financial services, is the ability to "shop around" so as to compare costs and advantages. The insurance industry is taking this to heart in a new service that goes live today. Insweb will enable consumers to seek quotes from a range of companies and brokers on life, home, car and medical insuranee. The service, established by a group of 25 insuranee companies and related organisations is the first "marketplace" on the Internet for insurance information and commerce. Insweb plans to enable users to purchase insurance online. In a pilot program next month, residents of the state of Utah will be able to buy car insurance via the Internet (http://www.insweb.com). ----- Internet Law Review is a monthy paid-for publication available electronically or on hard copy from December. Among other issues, it will cover IT-law and the Internet; commercial security and encryption, using contributors from North America and Europe. Subscription is $220 a year and details are available from <www.thinck.com/publications.html>. Meanwhile, details of this week's Internet Law Symposium in Seattle are available at <www.discovery.org/ils95>. -----