Despite Security Pacific Corp.'s reputation as leader in financial technology, BankAmerica Corp. has chosen most of its own systems to run the merged consumer operations of the organizations.

BankAmerica executives said the decision will enable both bank's branches to operate on the same technology by the middle of next year - an aggressive timetable.

The executives acknowledged that many of the acquired bank's systems were more sophisticated. But they said a decisive conversion to most of BankAmerica's systems would cause the least disruption to customers while accelerating the cost savings that the merger offers.

Analysts applauded the decision. "Bank of America decided to go with the systems that are most easily adapted," said Francis Suozza, an analyst with S.G. Warburg. "They're controlling the integration process pretty well and pretty closely."

Mixing systems would pose problems, said Marty Stein, technology chief at Bank of America. "We think the faster you get through this, the better. We feel there is no such thing as a merger of systems," he said last week at a conference sponsored by the Federal Financial Institutions Examination Council. "You can use one system from Bank A and one from Bank B, [but] when you start to try to put them together, that's when you get into trouble."

BankAmerica executives are still evaluating the future role of one of Security Pacific's major technology commitments-a high-profile International Business Machines Corp. check-processing imaging.

BankAmerica is continuing to test the IBM check-imaging software as planned, and still many put the multimillion-dollar system into production at a future date, bank executives said.

However, "we are not aggressively pursuing imaging at this time," said Larry D. McNabb, group executive vice president at Bank of America. "We're focused on converting systems, getting the cost savings we've talked about, and customer retention."

Meat-and-Potatoes Approach

Security Pacific had a reputation for tinkering with advanced technologies such as "expert systems," to help bankers make better decisions, and electronic imaging of documents.

Bank of America has been known as more of a meat-and-potatoes company when it comes to automation. The San Francisco-based bank has concentrated, for example, on two major systems overhauls: cash management for its wholesale bank and branch automation for its consumer business.

In retail banking operations, Bank of America had 30% to 40% more checking accounts than Security Pacific. So the choice of Bank of America systems made sense, observers said. Bank of America retained 80% to 85% of its own systems, but also retained Security Pacific's safe deposit box, individual retirement account, credit-line, and small-business loan systems.

On the wholesale side, Security Pacific's strong suit, Bank of America also retained about 85% of its own systems. BankAmerica's approach reflects its dominants status in the merger.

|Best of Breed' Approach

When Bank of New York took over Irving Trust Co. - two banks of comparable size - systems executives set out to choose the "best of breed." Often a messy process, this choice resulted in the melding of a relatively equal number of Bank of New York and Irving systems.

In the so-called "merger of equals" of Chemical Banking Corp. and Manufacturers Hanover Trust Co., executives have moved more slowly, often keeping software from one bank that must be stitched together with software from the other bank.

In merging retail systems, Bank of America has tried to choose the system that already has the most accounts, causing the least disruption to customers.

While the Security Pacific systems were largely axed, a few managers the gotten top positions in the merged bank. Liam McGee, who ran Security Pacific's retail bank, now heads the retail distribution network for Bank of America.

The bank will treat out-of-state acquisitions differently, forming them into statewide banks using the core system of the largest acquisition. Eventually, BankAmerica plans to put all out-of-state banks on a common deposit system.

Retail Network Upgrade

Bank of America has spent the past four years upgrading its retail network in California in a huge project to deploy thousands of personal computers for use by tellers and platform officers. Some 30,000 PCs ultimately may be deployed in the project, called Coin, for Customer On-line Information Network.

Executives said Security Pacifics's approximately 1,700 ATMs will eventually be replaced.

The bank has already converted the asset side, so that all branches are now selling the same loan products.

Security Pacific's approximately 600 branches throughout California will be converted to Bank of America's savings and checking systems beginning in September. Bank of America expects to complete the conversion in second-quarter 19993.

Bank of America has 4 million retail accounts. It plans to convert Security Pacific accounts at a rate of 200,000 to 250,000 a weekend, beginning in October.

"The most difficult thing is to deal with the emotions of all the people involved, who've nurtured a system, and now they're told it's going away.

"We're not saying SecPac didn't have a good system. But in terms of impacting fewer customers, we picked the superior one," Mr. McNabb said.

The bank has said it will lay off 10,000 to 12,000 worldwide in the first three years after the merger.

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