To improve service in its retail and commercial businesses, First Union Corp. is building a central data base for customer information.

The $74 billion-asset banking company, based in Charlotte, N.C., is working with Systems Techniques Inc., an Atlanta-based consulting firm.

Kellie Wells, senior vice president of the bank's automation division, said the project goals are to give reps more comprehensive views of customer relationships; to eliminate data redundancy, and to make information consistent across the bank's multistate operations.

The bank is evaluating equipment vendors and determining a schedule for system rollout. "We're hoping to have the first business solution in place by the end of the year," said Ms. Wells.

First Union joins a growing number of institutions looking to strengthen their positions in an increasingly competitive marketplace by making better use of the customer information available to them.

Though most banks house vast amounts of such information, it is often unavailable to those who need it most, because it is dispersed in separate data bases.

Thus, data warehousing - the process of pooling information from disparate computer systems - is growing more popular at banks.

Most respondents to the 1995 technology in banking survey from Ernst & Young and the American Bankers Association had already built data libraries of customer, financial, and loan information or were planning or testing such projects. The survey queried the top 100 U.S. bank holding companies.

First Union began plans for its data warehouse last year. Like many financial institutions, it had found that having vast amounts of information from many sources makes it hard to view an entire customer relationship without extracting information manually.

For example, if the bank wants to assess the profitability of a customer relationship, a representative might have to access the mortgage system, the deposit system, and the leasing system.

The central data base will improve this situation, said Ms. Wells, by providing a single source of information for general queries and reports as well as more detailed transactions, such as target marketing, profitability, customer segmentation, and cost analysis.

"The reason we're doing this is to have information available to the people who need it when they need it," said Ms. Wells.

The system will also track "life-cycle events of our customers," she said, "so we'll know when it is appropriate to sell them a certain product based on what stage they're at in their lives."

The data warehouse will consolidate information from First Union's existing customer information system, which contains: bank-wide customer cross-reference file linking over 20 applications; the customer information file, which consolidates information according to customers living in the same household; and a sales support system.

Many of the users of the information warehouse will be employees at First Union's "customer relationship center," a new telephone center the bank is starting to build this year.

First Union determined the information needs for the warehouse by communicating with employees at all levels of the bank's business units and branches. Participants were brought together by Systems Techniques for a series of sessions in which they identified business processes and data requirements of the commercial and retail divisions of the bank.

"The sessions helped us define a decision-support platform and identify what information needs to be available for determining behavioral patterns of customers, defining our target market, and analyzing product and customer profitability," said Ms. Wells. "They also showed us what information needs to be available at what distribution point."

While First Union is initially focusing on customer information, the bank will eventually restructure other areas of their information systems, Ms. Wells said.

Systems Techniques has worked with other banks on similar projects, including Mellon Bank Corp., and Barclays Bank.

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