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Telstra Wants To Be Your Cashless Bank

8 June 2001

A year is a century in Internet time and the phone company has had a change of heart.

While One.Tel convincingly fails to become a telecom company, Telstra is determined to become a bank.

``It's a great new gig from Telstra, called Telstra Online Financial Services," said a Web dude. ``It's got some really cool stuff banking, insurance, super, home loans all coming to Telstra.com!"

``A great new gig? When? Where?" I asked, panicked to have missed it. My Web dude, a Telstra insider, looked unhappily like the One.Tel dude a little hat, goatee beard, vacuous grin.

``It's going before the board this month!" he said.

Was this a One.Tel Moment? Or was it true?

I got on the batphone to Ziggy. He was out to lunch.

An official Telstra spokesman confirmed: ``Yes, it's all possible. Our whole financial services strategy is being reassessed. We've got the green light for some of it. We've got working documents on all of this, but nothing is set in concrete yet. It's a very fluid situation."

In short, Dancing Dinosaurs can reveal that the nation's biggest dinosaur is expected this year to announce, to a dazed and confused public, an online financial services ``juggernaut" offering deposit accounts, insurance, superannuation, home loans and personal loans. It will be a ``one-stop-financial-shop" offering ``cradle-to-grave" financial solutions, etc.

The new division, called Telstra Online Financial Services (TOFS), will rely on a series of ``mega" alliances with the incumbents: a Big Four bank (probably Westpac or ANZ); an insurer (NRMA? AXA?), a superfund provider; share dealer; mortgage provider, etc.

``There's nothing like it on the market," said another Telstra insider. ``TOFS will offer a specially designed investor-directed portfolio service, the most advanced in the country which will let the investor decide where to invest his or her super funds, share portfolios, and unit trusts."

Not long ago I visited the shop floor at Gillette's factory in America. All the workers ``managed" their own super funds (or 401K policies), courtesy of Fidelity. They could switch their assets in and out of sectors and even nations. One razor-blade sharpener was peering at his European assets.

Is this what Telstra has in mind? ``Yes. But a broader product range. Aimed at everyone. And deeper. Far deeper," my Telstra dude said, tugging his goatee. ``It'll be unlike anything you've seen."

If so, the banks, insurers and fund managers would dearly like to be involved. Smaller operators are queuing up for a slice: eQuest, Method & Madness (an SMS subsidiary) and a firm called WSA are fighting for the lucrative e-business software consulting contract.

Can we all look forward to a Telstra deposit account, Telstra insurance package and Telstra super fund, available from Telstra.com or possibly at Telstra shops?

A Telstra spokesman cautioned: ``My understanding is that in principle we won't be competing with the existing banks."

What he's trying to say is that Telstra will probably be offering an online account, not a branch-based account. Both would compete with existing banks just as high-yielding accounts from ING and AMP compete with NAB et al.

Last year Telstra shied away from direct banking. In mid-2000, Telstra's then executive director of emerging business, Gerry Sutton, said the group did not have the balance sheet to offer banking services. ``We are not going into that [payments system] type of business. We won't be taking on the banks."

``A year is a century in Internet time!" my Telstra dude explained. I cannot recommend my dude enough, and am happy to rent him to readers if you're short.

Speaking of which, the other day I came across an interview with Marty Cooper in the MIT Technology Review, June 2001. Marty is everyone's favourite dude: he's the eminent Motorola executive credited with having discovered the mobile phone.

Marty offers a glimpse of the future of wireless. He reckons it'll take until 2014 or longer to see its full potential. We're all ``too impatient" with the new technology, he says. He reckons his grandchildren will buy their groceries online, as night follows day. But not him.

``How many years do you think it took from the time the first microwave oven was available until you could be fairly certain your neighbour had one? Nineteen years! The whole Internet thing is only five years old. People are saying it's a failure. Wait a second. To really achieve the potential of the Internet, it's going to take longer than anyone thinks.

``Remarkable things can happen. We'll take a picture with the push of a button, and in seconds it will appear on our Web site for our friends and family to enjoy. You'll download a five-minute song in 20 seconds directly to a device that plays the song. Or games. Imagine a kid in Shanghai and a kid in Cleveland, playing together with absolutely no geopolitical barriers. Someone still has to figure out how to charge you for all these things, but they will."

And finally, a word about catproofing your computer, from a site called www.pawsense.com: ``When cats walk or climb on your keyboard, they can enter random commands and data, damage your files, and even crash your computer. PawSense is a software utility that helps protect your computer from cats. It quickly detects and blocks cat typing, and also helps train your cat to stay off the computer keyboard." Meow.

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