What-started off as a broad, thesis about the future of home banking for one Pennsylvania community banker has developed into an innovative model for other banks to follow.

As executive vice president at Apollo Trust Co., a $108 million-asset institution with a main office in Apollo, Pa., and four branches, Ray Muth supervised the bank's development of an electronic bulletin board.

Meanwhile, progress lagged on his thesis work at the Stonier Graduate School for Banking.

Realizing that his thesis was too broad, he decided last April to narrow it down by combining the bank's plans with his Stonier thesis.

Essentially, the bank project became his thesis.

Now, two months after going on-line, the project has blossomed into a popular interactive electronic bulletin board that offers its customers a variety of services, including home banking.

Through electronic mail instructions to bank employees, customers can use the service to look up balances and transfer funds between accounts -- all from their homes.

In addition, software programs are in the works that will allow customers to apply for installment loans and mortgage loans.

Mr. Muth's work on the bulletin board service was inspired in part by his exposure at Stonier to Compuserve, the nation's second-largest on-line service.

His idea was for the bank and the town of Apollo to develop their own on-line network.

"Everyone calls it 'the B,'" Mr. Muth said. "It's natural for a community bank to have a regulax bulletin board as a service to the customers. This is just a modified version expanded to the highest level. Some banks offer toasters; we offer information."

Besides the service's home 'banking functions, the public portion of the bulletin board is open to customers who want access to news and information from a recently installed satellite dish. Customers can scan community news, the weather, even USA Today.

Mr. Muth stressed that access and information on the board are free and retrievable for town residents. For nonresidents, the cost is only the telephone charge. All that is needed are a PC and a modem.

The Pennsylvania banker said he believes the bulletin board's greatest potential could be in its marketing capability for the town, since the new electronic service puts users in touch with the local business council, the Strongland Chamber of Commerce.

Business opportunities would be welcome because the community has been through some tough times in recent years.

With a population of about 15,000, Apollo lies in. a valley about 35 miles northeast of Pittsburgh. Apollo's residents suffered economic hardship when local steel mills -- the area's economic mainstay -- shut down, resulting in many unemployed.

Mr. Muth, who also sits on the buiiness council, said local companies could place detailed descriptions of themselves and Apollo so that "people on the outside can become aware of the opportunities that Apollo has to offer.

"We are in an economically challenged area," Mr. Muth explained. "Since phone calls to Pittsburgh are long-distance, we may not appear on any future information highway."

To date, the project has cost the bank only about $5,000, but that's because community members pitched in to assist.

Scott Brunermer, Apollo Trust's internal auditor, lent a hand, as did Shawn Kupec, a local computer enthusiast who analyzed and consulted during the project's development.

"Ray came up with the idea last April," said Mr. Brunermer, who will be responsible for the service's maintenance. "We had an old mainframe that we were looking at for the project, but we saw that it just wasn't compatible. We then brought in Shawn, who told us what to get and how to integrate everything."

Mr, Kupec of nearby Vandergrift is a case manager with the Allegheny Valley Counseling Center. Once a month, he attends meetings at the local computer club, where he met Mr. Math. After finding out about Mr. Muth's plan for the electronic bulletin board, Mr. Kupec decided that he would help.

"I was doing it on a voluntary basis," explained Mr. Kupec, who described Apollo as a tightknit community. "I have to credit Ray. He's been at the center of pulling the area back together."

The system was built using Intel's 486-chip DX 66 networked with a 386-chip PC, which would be linked to the satellite. Finally, two phone lines were fed into the 486.

Mr. Kupec noted plans to upgrade with additional phone lines "so that it can handle up to 250 simultaneous users."

It is uncommon for a bank, especially a community institution, to offer such a service, an analyst said.

"It sounds like a free Compuserve, in which case it's really more in competition with a paying service," said Deborah Williams, a technology analyst at Tower Group of Wellesley, Mass. "I'd have some questions about security for the home banking functions, but for a small bank, it sounds adventurous."

Mr. Kupec responded that the system will have two sets of passwords, one for access to private banking functions and a second for access to direct trans' actions. Meanwhile, Mr. Muth has talked of adding imaging capability to the system so customers can dial in and get copies of their checks. "We are about a month away from starting that and about six months away from implementing it," he said. Mr. Muth is pleased with the system's development, describing it as a "labor of love." When asked what grade he expects to get from Stonier for his longneglected banking thesis, he responded, "Well, I hope to get an 'A'."

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