Huntington National Bank, in conjunction with Ohio University, has completed testing, with good results, an advanced satellite technology for possible use in disaster recovery and other data-communications applications.
The test, which ran from October 1993 to June of this year, was conducted using the Advanced Communications Technology Satellite, released into orbit last September by the shuttle Discovery.
The bank and the university worked with the National Aeronautics and Space Administration's Lewis Research Center in Cleveland, which manages the satellite, to test satellite transmission of financial data, such as deposits, account balances, and funds transfers, in the event of a failure of telephone lines.
Huntington successfully connected two sites in Ohio - its data center in Columbus and its regional center in Parma - using satellite dishes of the type known as very small aperture terminals. Data were rerouted from regular phone lines to the satellite dishes, simulating the events that would take place during an actual failure of the phone lines.
According to Michael Whetstone, manager of data communications at Huntington, the experiment determined that satellite connections could meet the network's restoral requirements with minimal time and loss to a bank.
Mr. Whetstone said the bank could install a satellite dish in a couple of hours and have an entire regional center back up and running. This speed is a big benefit over disaster-recovery plans based on the regular phone lines the bank now uses, he said.
Other Uses Possible
Mr. Whetstone added that satellite communications may have other applications for Huntington, particularly as the bank continues to expand its operations. The bank, the principal subsidiary of Huntington Bancshares a $16.5 billion-asset regional holding company based in Columbus, already operates a number of remote mortgage companies up and down the East Coast.
And, although it primarily operates in the Midwest, it is engaged in buying banks in other areas, such as the South. Satellite communications becomes a viable technology for linking such sites over a wide-area network, said Mr. Whetstone. New banks will be able to be brought on line quickly using satellite technology as opposed to terrestrial lines, he said.
The Huntington experiment is the first in a series of projects that will continue over the next two years with a variety of industries, said Don Flournoy, a professor of telecommunications at Ohio University in Athens. Mr. Flournoy acted as the project manager for the experiment.
Seen as Prototype
Although the use of satellite communications for disaster recovery is not new to the financial industry, the ACTS satellite is considered to be a prototype of an advanced technology that will provide advantages over current satellites, said Mr. Flournoy.
ACTS is considered to be the first completely digital satellite, he said. Digital transmission is a format banks already use to store and process data and transmit it over phone lines, so the satellite will be compatible with that environment, he said.
Furthermore, the satellite operates in a new region of the frequency spectrum that provides more bandwidth for data transmission and less interference, said Mr. Flournoy.
The Federal Communications Commission is allowing the use of these frequencies for the ACTs project. It has not yet allocated the space for commercial use (as it has with AM, FM, cellular, etc.). Mr. Flournoy said that the FCC may begin procedures for allocating the spectrum in 1995.
Wide Bandwidth
The satellite can deliver as much bandwidth as needed when needed, in contrast to conventional satellite usage, which requires a bank to reserve a particular amount of capacity, that may turn out to be too much or too little for its needs.
With ACTS, financial institutions can be charged more accurately based on how much bandwidth they use and the duration of usage, said Mr. Flournoy. The satellite can provide efficiencies not currently available for a variety of applications, he said. "As banks increasingly get into the use of broadband communications, for the use of video in automated-teller machines, for example, the satellite will bring advantages of large bandwidth capacity and digital technology for sharp pictures."
Huntington bank currently has two video-banking terminals that allow customers to remotely conduct business with bankers, such as opening accounts, buying investments, and applying for loans.
The kiosks - one situated at a Huntington office in downtown Columbus, the other at a site in Dayton - communicate with the bank's central office over digital phone lines. Mr. Whetstone does not rule out satellite technology as the transmission medium for future video kiosks.
