While American banks have been cautiously testing consumer interest in electronic home banking, a British savings bank has decided to bypass pilot programs and has plunged into a full-scale effort, offering a wide range of banking and nonbanking services.
All but unknown outside this ancient city in the East Midlands, the bank, the Nottingham Building Society, has grabbed an early lead over other commercial and savings banks.
''The difficulty for my competitors is that they don't know whether they want to try to match me,'' John Webster, Nottingham's managing director, said at the bank's headquarters. ''Each day that they wait to see how electronic home banking is developing,'' he said, ''is another day we get further ahead.''
Nottingham's ''Homelink'' system is the result of a partnership with the Bank of Scotland and Prestel, a service of state-owned British Telecom. Prestel allows homeowners to call up news and commercial information on their television sets for the price of a local phone call.
Mr. Webster is fond of comparing Nottingham to Apple Computer, the Silicon Valley company that built the home computer market while established computer companies waited to see what would happen. He and colleagues decline to provide figures on the number of consumers, the growth since Homelink began a year ago or its financial performance. That information would be too helpful to potential competitors, they say.
Mr. Webster also would not say when Homelink would pay back its investment, now over $5 million for Nottingham and about $15 million for the three partners. But he did say it should be operating profitably by next fall.
No one doubts that Homelink has many thousands of customers and is expanding. It was originally marketed chiefly at businesses and professionals outside the Nottingham region. Marketing broadened last September when volume shipments of Homelink-tailored computer terminals became available.
Homelink now has customers throughout Britain. Nottingham customers are also participating from Denmark and Belgium, and plans are under way to allow customers in Hong Kong, New Zealand and Australia to link up. None of the partners have quarreled with reports that they hope to have 100,000 users by 1986.
How Service Works
Homelink users operate the service with a computer terminal connected to their telephone and television. A typical home computer can be used - no small consideration in a nation that has installed more home computers per capita than any other - or else Nottingham will provide a terminal. The $350 terminal is available for free to 12,000 depositors with large accounts and at a substantial discount to 18,000 others. The terminal is assembled by Tandata of Britain. Homelink can transfer money between accounts, pay bills and arrange loans. They can also compare prices and order goods from a few major retailers, check local restaurant menus or real estate listings, arrange vacations through the Thomas Cook Group, enter bids in Homelink's regular auctions and send electronic mail to other Homelink users. New services are being added.
''If you center on three or four services, you won't win,'' said Mr. Webster. ''Everybody uses the home banking,'' but other features attract special groups, he said.
Homelink users who agreed through Nottingham to be interviewed supported that view. Robert Hallett, who manages a restaurant near London, said that while home banking was the main attraction to him, he had participated in auctions and in a monthly contest for cash prizes.
'Fed Up' With Bank Lines
Ronald Miller, a Glasgow optician who recently signed up because he was ''fed up'' with bank lines, is hoping that he will be able eventually to send electronic mail over Homelink to a cousin in Winnipeg, Manitoba.
Mr. Webster said that Homelink has a backlog of 300 software projects that will improve or add services. Lack of trained programmers has been the bottleneck, he said. A big development will be extending the connections with Comp-U-Card, a company in Stamford, Conn., whose electronic equivalent of a mail order catalog has stirred interest among Homelink users.
Talks are also under way to sell insurance, to increase grocery shopping options now offered in parts of London and to provide services such as route planning for private airplane pilots. ''Customers have an insatiable appetite for new developments,'' said S. E. Brandreth, Nottingham's deputy general manager.
Mr. Webster said: ''I am delighted because all my competitors are saying that the American experience shows that people aren't ready for teleshopping. They have all made a big mistake in trying to test consumer response with trial programs, which leaves people unsure about what's offered and how permanent it will be.''
Alan Best, who has overseen a Midland Bank program that offers 300 customers a chance to make account inquiries through their television set, sees some validity in that argument. ''There has been a much higher level of interest than we expected,'' he said. Midland appears to be the most advanced of Britain's large commercial banks in the home banking field. It will decide in the next six months whether to increase its involvement substantially.
In-Home Banking in the U.S.
In-home banking in the United States is still in its infancy, with banks such as Chemical in New York City still working out the bugs from its service, which offers somewhat limited features. In October, Knight- Ridder Newspapers Inc. began a two- way home information service in southern Florida that customers can use to pay bills, select news items and play games.
It is no accident that the system was developed by the Bank of Scotland, a commercial bank with a restricted geographical base, and Nottingham, Britain's 37th-largest savings bank. Both banks see Homelink as a way to develop a customer base throughout England and increase deposits without the expense of opening branches.
Homelink also provides increased use of Prestel, a system that British Telecom has had trouble marketing to home users.
Barclays Connection
Homelink users can deposit or withdraw cash at more than 200 Thomas Cook Travel Shops around the country. And an agreement between Bank of Scotland and Barclays Bank gives users with Bank of Scotland accounts access to automated tellers and check cashing at thousands of Barclays branches. Barclays owns just over one-third of Bank of Scotland.
''We view it as potentially very significant to the Bank of Scotland, which could end up gaining access to England without an extensive service network,'' said Bryan Crossley, a banking analyst at the Edinburgh office of Wood MacKenzie. ''It could make a profound difference in the economics of branch banking.''