When AT&T Corp.'s data processing arm scrapped its original plans for a new software system, the handful of banks using the package at their sites were hung out to dry.
The software that was abandoned, called the Universal Financial System, or UFS, is at the heart of several legal disputes between AT&T and a number of the banks that installed it. (Technology, October 1994).
In switching directions, AT&T Global Information Solutions-formerly NCR Corp.-has decided to use Autobank, a software system based on client/server technology supplied by a subcontractor from Sarasota, FL, Virtual Network Inc., (VNI). The new package will be installed at a service bureau that runs the back offices for more than 500 banks, thrifts and credit unions. The software will replace software applications that are, in some cases, 20 years old, according to Mike Grabeman, a vice president with the Data Services Group. But as recently as last year, AT&T had planned to replace the older system with UFS, a program that runs on a mainframe system and is thus considered headed for obsolescence.
Many of the banks that installed UFS in their back offices faced numerous problems with the program. But NCR, and later AT&T, reassured them that the software would work and that a corporate commitment to the program was borne out by the intention to install the system in the Data Services Division, said a source close to several of the banks who would not speak for attribution.
There were perhaps as many as 2,000 banks and thrifts that ran UFS' two predecessors-CIF, a commercial bank product, and Class, a software program for thrifts-according to former NCR executive Peter Augusta. That customer base dwindled as mergers and bank failures swept many of these institutions out of existence. NCR and AT&T executives hoped that installing UFS at their service bureaus would guarantee a stable customer base for the software program, and thus generate enough revenue to justify keeping the software up to date.
AT&T made "definite commitments that were stated orally in 1993," says Jonathan Azrael, a Baltimore attorney who is representing City National Bank of Miami. City National was a test site for the software, an effort that cost the bank millions of dollars, Azrael alleges. It now has a complaint pending before an arbitrator (Technology, November 1995). The Miami bank and the other UFS customers were led to believe that the software's future was assured. But Azrael alleges that when Ma Bell backed off its commitment, it simply told its customers, "'There never was a commitment. We just stated our intent, and we changed our mind.'"
Spokespersons for AT&T declined to comment on the issues surrounding UFS because of the pending litigation.
By late 1994, AT&T's management was seeking bids for a system based on client/server technology.
VNI purchased the marketing rights to Autobank, which was originally published by Tara, a software development firm in Lagos, Nigeria. Tara's principals, Jim Sheehy and Seni Williams, got their start writing client/server software for oil companies in Nigeria, says John Weinstock, president and CEO of VNI. The two then came up with Autobank, which they sold to 22 banks in South America and Africa and one in Europe.
By late October, Grabeman said AT&T was scheduled to begin processing one of its customers on the new program within a few weeks.
Weinstock said Autobank was an adequate system, but it needed substantial revision to be adapted to U.S. regulations.