Treasury Services Corp. is near completing work on an asset/liability management system designed specifically for a massively parallel processing platform from AT&T Global Information Solutions Corp.
Though the system, known as the Treasury Services Evaluation and Reporting system or TSER, will not be generally available until May or June, Banc One Corp. has already begun installing it.
Under terms of a multimillion-dollar agreement with AT&T, Treasury Services will not support the use of its system on any massively parallel hardware but AT&T's for the next two years.
AT&T has also received exclusive rights for five years to market and sell TSER products on all AT&T hardware platforms in Japan, Korea, and Taiwan.
The deal is a key part of AT&T's push to provide financial institutions with a wide range of information management products on its hardware.
"With Treasury Services as our partner, we will give banks the ability to gather detailed customer and financial data from multiple systems, and use this data to better manage profitability and risk," said Daniel R. Shannon, assistant vice president of worldwide financial services marketing at AT&T.
The companies, which have been working on the TSER conversion for over a year, expect their arrangement to increase the acceptance of massively parallel processing technology at the world's largest banks.
The new system "will offer a proven solution, and quickly turn massive amounts of data into usable information for decision-making," said Treasury Service's president John C. Dorman.
The TSER system - which includes such applications as performance reporting, transfer pricing, portfolio analysis, customer analysis, and budgeting and planning - is one of a few bank-specific software packages that take full advantage of the massively parallel processing environment.
Massively parallel systems consist of cluster of microprocessors that pool their computer memory but operate independently of one another.
Many existing banking applications employ a type of parallel processing known as "symmetrical multiprocessing," in which a variety of Unix-based hardware platforms use relational data bases from such vendors as Oracle Corp. and Sybase Inc.
Treasury Services has 20 bank customers in various stages of installing symmetrical processing systems. About half of these use AT&T computer platforms, and all use Oracle data bases. Eight are up and running, including systems at Banc One, and Chemical Bank Corp.
Mr. Dorman said he believes more banks will begin to adopt massively parallel architectures, particularly for examining customer relationships, because of the larger capacity the systems offer.
"The continued growth of major banks and their success in applying TSER to an ever-increasing range of financial and operational decisions will soon test the limits of symmetrical processing platforms," he said.
Symmetrical servers typically integrate from two to 12 processors, whereas the more powerful massively parallel platforms include hundreds or thousands of processors that work simultaneously to handle many tasks.
In addition, conventional data bases on Unix platforms generally suffer performance problems when handling more than 100 gigabytes of data for information management applications, said Deborah Williams, technology analyst with the Wellesley, Mass.-based Tower Group.
Yet, databases of at least 250 gigabytes are often required by large superregionals with $35 to $45 billion in assets, she said.
Banks with large data storage needs usually have an array of separate files and databases. Massively parallel processing enables banks to merge these separate systems into a single, large-scale database environment.
While massively parallel processing has caught the attention of the financial industry, most banks have decided to move ahead cautiously.
Tower Group estimates approximately 25 massively parallel processing machines are now installed in U.S. banks. Installation sites include Chase Manhattan Corp., Citicorp, Bank of America Corp., and First Chicago Corp.
Most of the systems are being used for decision support and data analysis for portfolio management, credit card usage analysis, and target marketing.
Current annual expenditures by U.S. banks for symmetrical processing and massively parallel systems are just under $2 billion. Less than 5% of that figure goes toward massively parallel equipment, Tower Group research shows. By 1998, the firm estimates the parallel systems market will reach $2.8 billion, with massively parallel equipment's share growing to 30%.
Mr. Dorman said he expects the majority of Treasury Services' customers to stay on the symmetrical processing platform, with only the largest switching to the massively parallel environment.
The massively parallel system is targeted at banks starting with $20 billion to $40 billion in assets.
Ms. Williams said prospective buyers in the United States probably will wait to see how the Banc One implementation pans out before investing in the system.