IN A BUSINESS that changes as quickly as the fashion industry, AT&T Universal Card Services' new research and development lab could be described as a high-tech fitting room.

At the Applied Technology Center, executives from various divisions of the giant Jacksonville, Fla.-based credit card issuer can try on the latest in computer systems--and suggest alterations to tailor the systems to their business objectives.

"That for us is going to be a significant advantage," said Leslie Palmer, vice president of emerging technologies at the credit card unit of American Telephone & Telegraph Co.

"One of the most difficult areas has proven to be the understanding business requirements," she said.

The opening last month of the center means systems can be tested and refined before Universal goes to the expense of building them into the 2,200 workstations around the company, she said.

The items on Ms. Palmer's long-term agenda range from systems that would allow customers to communicate with their account representatives by voice or interactive television to artificial intelligence programs for Universal's marketing and fraud control divisions.

One current project is to add imaging programs to customer service associates' workstations. The technology would enable the representatives to instantly access replicas of past correspondence when customers call, saving time and averting transcription and filing errors.

Competitors, meanwhile, may wonder why AT&T Universal needs any more technological advantages.

From the start, the unit has sought to build on the communications capabilities of its telephone company parent--not only by marketing a card that could double as a calling card but by focusing on the communications-intensive task of customer service.

Employees are imbued with a set of quality goals, reinforced by performance awards and by brightly colored signs around the campus-like facility in Jacksonville.

Almost anywhere you go there is a sign bearing one of the seven phrases that define the company's mission: "customer delight," "mutual respect," "trust and integrity," "teamwork," "continuous improvement," "commitment," and "a sense of urgency."

Coming to work at Universal is "like stepping in front of a quality fire hose," joked David K. Hunt, the former Signet Banking Corp. card chief who took the helm in Jacksonville earlier this year.

Paul G. Kahn, who resigned as Universal's chief executive to form an investment banking boutique, had "stressed empowerment, empowerment, empowerment. That was what they thought would differentiate them from everybody else," said Paul Martaus, a payment systems consultant based in Tampa, Fla., recalling Universal's emphasis on giving the associates the power to respond to consumer needs.

It evidently worked.

Since issuing its first card in 1990, Universal has quickly become the second-largest issuer of MasterCard and Visa credit cards in the nation, with more than 16 million. Along the way, the unit, which issues cards through an affiliate of Synovus Corp. and buys the receivables, became the first credit card company to win the Malcolm Baldrige Award for quality.

Now, experts expect Mr. Hunt to start focusing more on account building. He made a national reputation using computer modeling technologies to target Signet's offerings to people likely to carry big balances, making the Richmond, Va., bank one of the fastest-growing credit card lenders in the nation.

Average balances in the AT&T portfolio have lagged the national average, although the company ranks among the top 10 with more than $7.3 billion of receivables.

Mr. Hunt has said his objective in his new job is to build profits in a way that complements AT&T's communications products. And he noted that Universal Card Services enjoys "an awesome availability of resources" to accomplish that goal.

AT&T's processor, Total System Services Inc., is overhauling its systems in a way that could enhance AT&T's ability to target its cards to individual consumers, notes Kenneth L. Tye, senior vice president of the Columbus, Ga., firm.

Total Systems, a unit of Synovus Corp., recently extended its contract with AT&T through the end of the century.

All of this puts Ms. Palmer in a key role.

She cautions that her mission "is not technology for technology's sake." The opening of a research and development lab underscores that technology is viewed as a tool to accomplish business objectives.

Ms. Palmer, who joined the unit in 1989 after eight years in charge of systems at MasterCard International, divides her mission into five categories, each keyed to the strategic objectives of the corporation.

The first area of focus, which Ms. Palmer calls "the human metaphor," looks into making sure the interaction between employee and computer is "as intuitive as driving a car or discarding a file in the trash," she said.

That was the motivation behind the Universal Windows, or Uwin, platform the firm recently developed. Customer service reps once needed to view at least seven screens to obtain the information they needed to respond to customers. Now they get it on one. And employees have confirmed that this has helped them concentrate on the customer rather than the computer.

"You can't have customer delight if you don't have servicer delight," Mr. Hunt said, in a play on one of the firm's quality slogans.

Ms. Palmer said the new system relies on "graphical user interface" which allows the user to select icons with a mouse to quickly call pertinent information to the screen.

These systems are "more intuitive" than what existed before. But Ms. Palmer said additional refinements are in the works. "They will be moving to more natural interfaces, such as voice or handwriting recognition," she said, adding that the net result will be greater productivity and less training.

"The next steps are to move to other ways of interacting with the workstation that are more natural than keying in," she explained. "When associates log in, they have to key in information. What might be a good method [of logging in], would be to just sit down and say |Leslie Palmer.'"

The human metaphor has to do with the interface between the employee and the computer. Another of Ms. Palmer's areas of concentration, called "access technologies," addresses the ways customers make contact with the company. "This is the area where we've had vast advancements in the convergence of computer and consumer products," Ms. Palmer said.

There are any number of ways customers could access account information or communicate with Universal Card, Ms. Palmer said, ranging from interactive television to mobile phones to video phones to multimedia bank kiosks.

One potential tool for Universal customers is the portable personal computer manufactured by AT&T and Eo Inc., the Mountain View, Calif.-based start-up company that once featured the device in ads asking, "have you ever sent a fax from the beach?"

Whatever tools eventually become available, Ms. Palmer said, the objective will be a more personalized form of communication.

While other initiatives go under more rarefied titles like, "advanced computing architecture," and "the ubiquitous network," they all basically boil down to one thing: "You have to be flexible, you have to be able to respond to market conditions," Ms. Palmer said.

She said the company must be able to "absorb and exploit new technology without disrupting the existing environment."

One way to accomplish this is through the use of a new kind of program known as "middleware," which Ms. Palmer described as "a layer of software between the applications and the operating systems [that] enable the company to add new programs without recoding.

"We're defining architecture that will support us the next five to 10 years, and that will allow us to do a lot of these different solutions," she said.

Another aspect of Universal Card's technology program is making sure the various components in the communications infrastructure form a seamless link connecting customers to the various products the AT&T unit offers.

Ms. Palmer envisages a system that "becomes a natural extension of your life, no matter what device you use, no matter what access mechanism you use."

Important projects that fall under this heading include the development of encryption techniques that unobtrusively protect customers' privacy and ensure security as they communicate with the firm.

The final component of Universal Card's technology plan is the incorporation of "artificial intelligence," a new generation of computer programs that more closely mimic the human thought processes. Various branches of artificial intelligence programming--known as "neural networks," "fuzzy logic," and "expert systems"--are among the technologies Universal hopes to enlist in tasks ranging from fraud detection to credit-line determination.

Ms. Palmer said Universal will be using artificial intelligence software in its marketing division "within a year."

With these types of systems "you can do it faster, you can do it better, and you know your results are going to be consistent," she said.

Experts say any computerized decision-making program could be considered "artificial intelligence." But the tools Ms. Palmer is considering would allow a marketing department to make subtler distinctions than the credit scoring models that already are in wide use around the credit card industry.

The programs allow the computer to say not only |yes' and |no,' but |maybe,' said Jerome Svigals, an electronic banking consultant.

The people in the "maybe" category make up "a very important part of the populations," he said. They represent "a significant opportunity" for anyone with the tools to identify good risks who might have been rejected under a more rigid system.

"If you're looking for a market segment that would include all 25- to 35-year-olds with an income of $100,000, then that would exclude in a normal program, 20-year-olds who make $150,000," Ms. Palmer said.

"You want to be able to say not only |yes' or |no,' but assign grades so you know you're getting all the people who would accept that service."

Mr. Svigals said the move is in keeping with AT&T's reputation as an innovator willing to commit resources to building its business. More conservative players "like to see the technique being used on 10 million people over a 10-year-period" before trying it, the consultant said. "They could be left in the dust. When these new techniques come to the market, you can't wait."

"You have to be very nimble," Mr. Hunt concurred, sounding more like a retailer than a banker.

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