Bank of Montreal has completed the first phase of a project aimed at improving its retail services and gathering new business.

Using software from American Management Systems Inc., Fairfax, Va., the bank has greatly reduced the amount of time consumers must wait to get decisions on loan applications.

In the coming year, the bank plans to expand its use of automated- decision software while also making use of predictive modeling systems designed to help it sell products and services more effectively.

The effort is part of a trend in which banks are working harder to identify their best customers and expand relationships with them.

"We have used credit scoring and a whole host of technologies like that over the years" for account management and risk management, said Robert Pearce, a senior vice president at Bank of Montreal, which has more than $100 billion in assets.

"Clearly that technology is now coming over the wall, and soon we're going to be using it on the marketing side," he said.

Initially, the bank has used AMS software, known as Encounter, in its mortgage operations. Loan applications that once took at least 24 hours to approve or decline can now get a decision as quickly as 12 minutes. The system also is credited with increasing automated decisions by 20%.

Encounter has helped the bank automate credit bureau information retrieval, decision analytics, and workflow in credit application processing. The bank recently moved its consumer installment loan volume to the software.

Bank of Montreal also plans to use AMS software for account management and risk-based collections in its credit card operations later this year. The bank, a MasterCard-only issuer, has over four million cardholders.

Eventually, the software should let employees who currently don't sell loan products to do so. About 1,000 employees through 1,200 branch offices sell loans today. That number could rise to 4,000, according to AMS.

The software "will be driving and automating a lot of the judgmental stuff that we've done over the years," said Mr. Pearce.

In addition to upgrading its decision report capabilities, Bank of Montreal also is attempting to improve its ability to appraise the profitability of its customer relationships.

"AMS, among others, will be helping us in this area," Mr. Pearce said.

According to Peter DiGiammarino, an executive vice president at AMS, relationship management is one of the more important tasks for banks.

The overall goal of learning more about customers should be to create a "common set of experience for customers who deal with different areas of the bank," he said.

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