When First National Bank of Three Rivers, Mich., took over the processing for the branch it had bought from Old Kent Bank and Trust Co., the job didn't move to a high-powered PC or spiffy new midrange computer.
Instead the processing, which a service bureau had handled, was moved to an older System 36 midrange computer from International Business Machine Corp.
Many consider the System 36 an outdated box - IBM has ceased manufacturing the computers, in favor of its AS/400 line. But many community banks continue to find the 36 reliable and cost effective.
"Although IBM stopped making the hardware a number of years ago, many banks stuck with the system because they have found it to be a cost effective solution," said Bill Bradway, a technology consultant at Tower Group in Wellesley, Mass.
"There is a segment of banks out there who do not need to have the most up-to-date technology and are completely satisfied with the old technology. They have realized that they do not need to make investments into the new machines."
First National of Three Rivers counts itself among those that still believe in the 36's abilities. Officials at the bank said that the hardware meets its data processing needs, and that there are no immediate replacement plans.
Through an arrangement with Heathrow, Fla.-based Fitech Inc., the $97 million-asset community bank converted over 2,000 customers from the new branch to its System 36, which runs Dimension 2000 data processing software from Kirchman Corp.
"We have been using Dimension 2000 for the last 10 years, and it works very well for us," said Ms. Kline. "We do not see the need to update our systems at this point."
Robert Babcock, the national market segment executive for community banking at IBM in Atlanta, said that as long as there is support for the System 36 and its applications it will be a viable solution for community banks.
"It doesn't look like support will end in the near future," he said. "As long as banks are happy with what the system can do and they do not want to harness new technology, it is a viable option."
