Arkansas National Bank, applying what its president calls "a little Arkansas ingenuity," believes it has found a technology strategy that allows it to compete with institutions several times its size.

The $35 million asset de novo in Bentonville said it can offer comparable services to other banks in town, thanks to the installation of an expandable PCbased system.

According to Darnel Dykeran, the community bank's president and one of its founders, Arkansas National has grown seven-fold since it was founded with $5 million in capital in June.

But even with its booming start, it might seem impractical, expensive, and unwieldy for a bank of Arkansas National's size to employ such technologies as optical disk storage for reports, file folders, and check imaging.

Yet, that is exactly what the bank's executives have done, for an investment of about $400,000. The key to keeping costs down lies in utilizing the processing power of personal Computers, bank executives said.

"The PCs make it economical," Mr. Dykeran said. "I don't think two years ago we could have done this for five times the price."

But Mr. Dykema and his cofounders were indeed at the right place at the fight time to pull together a bank computing structure that relies on inexpensive and adaptable personal computers, rather than the more conventional mainframes, minicomputers, or Unix-based systems.

The combination of rising power and decreasing cost for PC-based systems was probably the most important contributor to the bank's ability to carry out such a plan.

But the bank's leaders also cut costs by 'agreeing to be guina pigs" for certain hardware and Software systems, such as Arkansas National's Banetec image camera and its Techniflex image software.

These technological enhancements are intended to bolster the bank' s customer service, thereby aiding the bank in its effort to play with bigger and betterentrenched competitors.

The Bank of Bentonville-- Arkansas National's closest challenger - has $400 million in assets and is owned by members of the Walton family, which founded the Wal-Mart department store chain, itself headquartered in Bentonville.

It was the buyout of another rival - First Bank of Bentonville - that brought about Arkansas National's creation.

Mr. Dykeran and Harry Brown, Arkansas National's executive vice president, were formerly employed at First Bank of Bentonville, until it was acquired last year by Worthen Bank of Little Rock.

"Harry and I found ourselves out of a job," Mr. Dykema recalled.

From there, the plan to offer a new local bank option was set in motion. An application was filed with regulators in November 1993, and Mr. Dykema and his partners received a preliminary charter in April 1994.

Each of the bank's 26 employees has a personal computer on his or her desk.

This gives the employees the ability to access the full records of any customer and handle an array of banking services without any additional aid.

The bank does not maintain bookkeeping or research departments since, according to Mr. Dykema, every employee can perform these functions on their own.

In this way, the PC technology actually contributes to the "hometown" feel that Arkansas National hopes to create in its branches.

"I don't think the customer even notices [the technology's] there," Mr. Dykeran said, pointing out that his was the first bank in the area to funfish customers with image statements.

With such productivity, the bank believes it can grow as much as three times its current asset size without adding more manpower.

Technologies such as check imaging help this productivity, Mr. Dykeran said.

"Your back room is cut down a lot ... not having to deal with those checks is a tremendous savings," Mr. Dykema said. "And everybody has access to everything - we don't even have loan assistants or secretaries."

As the power and price of PCs improve, even larger banks may make a case for extending the use of personal computers beyond their current boundaries.

"Given the current pace of technology, I wouldn't be surprised if PCs could soon do the same thing as a Unix box or a mini can do now," Mr. Dykema said.

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