After five years of development, Banc One corp. is putting into day-to-day use what many say is the financial industry's most advanced retail banking system.

The system's software, said by observers to have cost more than $100 million, will underpin Banc One's strategy to sell products tailored for individual customers and will help the bank cut back-office expenses associated with new acquisitions.

The completion of the system represents a major achievement for its codevelopers, which included Norwest Corp., Minneapolis, and Dallas-based EDS Corp., a subsidiary of General Motors Corp.

Efficiency in Sharing

The project was seen as one of banking's most ambitious attempts at "distributed processing." In this environment, personal computers, midrange systems, and mainframes can efficiently share data and software across a bank's network.

The developers also expect additional payoffs down the road as EDS is already marketing the system to selected banks.

Many banks and vendors have tried similar projects over the past decade, and all have failed. Attempts to build similar systems plunged software developers Anacomp Corp. and Hogan Corp. into financial crises in the mid-1980s. Another project started by Uccel Corp. was scaled down and completed by Computer Associates International Inc. after it acquired Uccel in 1987.

Tardy but Successful

Although the Banc One/EDS/Norwest project took two years longer than initially expected, observes say it is a success. "Having a core modular architecture will be a competitive advantage," said Randall Grossman, a manager at the Mac Group, a technology consulting firm in Boston.

At Banc One, the software is being installed in two phases. A core system of customer and account information first. Beginning in the third quarter of next year, a system incorporating lending and deposit activities will be added bank by bank.

Both phases are expected to bring bigger revenues per customer, and greater employee productivity. With the new customer system, the bank can capture seven times more information on clients and easily customize products to their needs, according to David M. Van Lear, president and chief executive officer of BancOne Services Corp.

With the installation of the new system, a branch manager will be able to come up with a new product - a 93-day certificate of deposit, for example - as a customer waits. "We need extreme flexibility at the product level," said J. Terry Lowder, vice president of the advanced technology group at BancOne Services Corp.

Quick Payback Expected

Banc One expects to recover its costs over three years.

In 1990, Norwest installed an earlier version of the customer file in all its 250 branches. Norwest will now migrate to the second version of the software and plans to begin testing the deposit system in late 1992.

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