Microsoft courts big banks

Microsoft (MSFT) is courting the financial services industry in its continuing quest to extend its franchise into lucrative vertical markets.

The company today offered a sneak peek at a new Web site development package aimed at banks and other financial institutions for establishing e-commerce applications.

The software, code-named Marble, is due to ship in September, said the company. Microsoft promises that it will simplify and speed up the process of building Web sites for conducting secure banking transactions, so that bankers can spend more time on the elusive job of building relationships with their online clients.

Microsoft has not announced pricing for Marble. Additional details on the software are posted to the company's Web site

Executives at the Redmond, Washington-based company are hoping the software will coax the financial services industry toward using Microsoft's stable of related software. The company plans to eventually offer "full-service" applications via the Internet.

Dwight Davis, editorial director for the newsletter Windows Watcher, said Microsoft needs to break ground in the financial sector with its e-commerce offerings.

"That is one of the key vertical markets for Microsoft, " said Davis, referring to the financial sector. "Microsoft is making a play to impress people" not only as an e-commerce provider, but in broader terms as a top-rate developer of industrial-strength business software. It is a sales arena that is shaping up as the fastest-growing software market segment.

If the company can gain acceptance with bankers--often the earliest adopters of emerging information technology--it will win important credibility. A banking industry endorsement is sure to stimulate sales in nearly a dozen other vertical markets--such as health care, retailing and manufacturing--which Microsoft is also courting, said Davis.

Yet, Davis pointed out that Microsoft Chairman Bill Gates has had a strained relationship with bankers in recent years and is facing some skepticism. Recent, widely publicized security problems discovered in its Internet Explorer Web browser and several messaging clients also threaten to dampen enthusiasm among bankers, who take security issues very seriously, he said.

"[Microsoft has] to overcome a certain mindset on the part of some bankers," said Davis.

Marble includes a gateway to existing financial applications, a scripting language for writing routines that enable Marble to communicate with bill payment and other services such as CheckFree, a server component to handle financial transactions, and security software which supports 128-bit encryption.

Microsoft said Marble complies with an existing standard interface for client-side financial software, called the Open Financial Exchange, which means it will work with popular applications including Intuit's Quicken and Microsoft Money.

The software is accessible through a standard Web browser. Developers can customize Marble using Microsoft's development tools and other Java and ActiveX-enabled tools.

Bank customers can access sites built with Marble to view balances on their bank and brokerage accounts, transfer money, and pay bills, Microsoft said.

Currently only a tiny fraction of the nation's banks and brokerages offer online transactions. However, analysts estimate that more and more financial institutions will set up online banking in the next few years as concerns about security issues are put to rest.