When Microsoft first briefed me on its new Active Statement feature, I was both impressed and surprised. I hadn’t expected this level of integration between the Web and personal finance software for at least another year. But when you think about it, it’s an obvious application of Microsoft’s strategy to build Internet linkages into all application software.

As a user of Money since the version 3.0 (the first version with an online banking link) beta-testing days of 1993, I was happy with the software, but not particularly enamored at having to establish a direct-dial connection to servers at Intuit Services Corp. in order to pull down my transaction data. It would be far easier to click over to my bank and get the data right from the Web, probably saving five minutes per access. But not willing to give up a database filled with 3.5 years of transaction history, nor interesting in mastering the convoluted process of importing QIF formatted files, I was left wondering when I personally would be able to use Web-based banking services. In November, Microsoft provided the answer with the introduction of Active Statements.

Definition:
Active Statement: A feature offered on Web sites that allows statement data to be seamlessly downloaded into Microsoft Money directly from the browser. Coding embedded in the data file prevents duplicate transactions from being downloaded into the Money register. More than 50 financial institutions, including Wells Fargo, Wilber National Bank and 29 of Digital Insight’s credit union clients, have agreed to offer Microsoft’s Active Statements. Already, more than 30, mostly Digital Insight clients, are offering it on their Webs.

And why not? If you already support statement downloading in QIF format, offering the Microsoft version is a routine programming chore, and there is no charge from Microsoft. According to Matt Cone, Business Development Manager at Microsoft, adding Active Statement downloading to an existing QIF function is “just a couple of days of development time.” Cone says that bank Web programmers can learn all they need to know to implement Active Statements at Microsoft’s OFC web page.

One of the most important reasons to offer Active Statements, according to Cone, is that it can substantially reduce the customer service time necessary to support data downloading. Walking users through the error-prone process of importing data into a Quicken file using a QIF formatted file can be a customer service nightmare.

There is one small catch though. To use the downloading capability, users must have a copy of Microsoft Money 97 which only runs on Windows 95. But Microsoft is doing its best to minimize that barrier to adoption. Financial institutions can display a link to Microsoft’s website (see Community CU screenshot to the right) where 90-day free trial versions of Money 97 are available for downloading. Users must pay about $35 to continue using the program after the initial 90-day free trial. Once Money 97 is installed users can demo Active Statements at Microsoft’s MoneyZone.

Open Financial Exchange
Intuit will be offering a similar feature later this year. And since Microsoft, Intuit, and Checkfree have agreed to agree on a standard format for online banking record layouts called Open Financial Exchange (OFX), banks will be soon be able to offer downloading to either Quicken or Money 97 using identical code (OFX specs).

Financial institutions react positively
We surveyed many of the thirty banks and credit unions that have adopted Active Statements since its November debut. While it’s too soon to call the feature a hit, most financial institutions reported positive feedback.

Members using Active Statements “feel as if they have more control over their money,” said Jim Craig at New Mexico Educators Federal Credit Union (Albuquerque, NM; $350 million; 45,000 members). “This is the type of feature that we needed to give our online banking product an interactive aspect.” NMEFCU first offered online banking in August 1996 and currently has about 1,000 members using it.

Craig is sold on Active Statements, “Microsoft has come out with a wonderful tool. Now, smaller financial institutions can offer interactive account information without the huge expense of becoming a partner with Microsoft or Intuit, and without the hassle of developing their own proprietary software.” But he is disappointed that NMEFCU receives no recognition in Money 97 itself or on the MoneyZone Web. “If a member looks us up in Money 97’s directory of online institutions, they are told that we don’t have online services. We’ve had a couple members get a little upset when they think they’ve bought Money 97 for nothing.”

Texas Bay Area Credit Union (Pasadena, TX; $90 million; 20,000 members) hopes to have 500 members enrolled in its Internet Account Access program and using Active Statements by summer, said Thomas R. Green, Data Processing Manager. Among the 300 members already online, initial feedback to Active Statements has been good. While Wilber National Bank (Oneonta, NY; $495 million) thinks the Internet will play a large role in the future of banking, they’re finding customers are cautious in moving to the service.

Although Wilber has offered Internet banking since July, most customers continue to use the bank’s proprietary PC software (from Online Resources). CEO Bob Moyer said, “I think that’s just a matter of evolution. The Internet is still used more as a search engine than for active things, though I think that will change.” Moyer sees Active Statements as “one more step into the future” where software gets smarter and handles much of the information retrieval burden.

Carol Szaroleta, Director of Marketing for APL Federal Credit Union ($100 million; 8,000 members), the smallest financial institution with Web-based account access, said the only drawback to offering Active Statements is that some members think the credit union is advertising for Microsoft. Szaroleta estimates that half of APL’s 1,500 online banking members use some sort of money management program. “Demand among our membership for interacting with money management software is high,” she said. “We have had the ability to export information in (QIF) format for several months. In November, there were more than 3,000 hits on the export button.”

Community Credit Union (Plano, TX; $430 million; 115,000 members), the sixth financial institution in the world to offer Web-based account access, will highlight Active Statements in its newsletter, but coordinator Kathi Cavanagh believes most members will discover the new feature by noticing the Microsoft logo on CCU’s Web site (see screenshot above).