Since May, consumers in Seattle have been able bank through noncash kiosks set up by Washington Mutual Savings Bank.

Two stand-alone terminals, each installed in separate Fred Meyer's discount department stores, let customers dial up a bank customer service representative and communicate via video link. Services offered in this pilot program include account openings, balance and rate inquiries, and loan applications.

The experiment - and more advanced projects - have gotten much attention in the last few years. Noncash terminals are said to be a relatively inexpensive way to provide services for which consumers traditionally have visited branches.

For all the talk, few institutions have actually installed noncash terminals, according to industry observers and research firms.

"The industry's in a holding pattern on this right now," said Stan Wandowicz, financial systems consultant with Olivetti North America, "but we don't expect that to last for long."

A recent survey of 11,267 institutions conducted this spring by Mentis Corp., a consulting firm in Raleigh, N.C., showed only 0.3% of banks using noncash kiosks. And of the rest, only 0.7% had plans to purchase them in 1996.

The reluctance of banks to purchase the kiosks is surprising to some. After all, automated teller machines usage rates demonstrate that consumers are comfortable with self-service banking.

Consultants said the cost of noncash kiosks may have scared off some banks.

Price tags range from $20,000 to $40,000 per terminal, and the high- speed communications lines needed to link the terminals to the bank can cost even more.

"It's a heavy duty research and development commitment," said Liam Carmody, partner at Carmody & Bloom Inc., a consulting firm in Woodcliff Lake, N.J. "Some of the earliest experiments were fun, but they didn't work very well."

Consultants agree that the technology may help reduce costs by eliminating the need for large numbers of platform personnel. But some said cost reductions should not be the main attraction.

"Banks have been searching for a set of technology that is an acceptable alternative to their platform personnel," said Robert Landry, a consultant with Tower Group in Wellesley, Mass. "But these terminals are not well- proven."

"If I were a banker, I would not be looking to reduce costs," added A. Christian Fredrick, managing director of Dove Associates, a Boston consulting firm. "I would be looking to increase business."

Banks that do use noncash terminals appear to have found some benefit. About 75% of the Mentis respondents that now use them plan to purchase more this year.

"We're not selling technology. Customers don't want that," said Michael Amato, senior vice president of retail financial services at Washington Mutual. "We're selling information and entertainment."

Mr. Amato claims the terminals have passed the most important test: customer acceptance.

Tracking by the thrift shows new accounts are opened as frequently using the terminals as visiting a branch.

"The driving issue for us was to see how people would react to the replacement of a fully staffed branch with a terminal," said Mr. Amato. "The real surprise has been consumer willingness to use them."

Other users of noncash terminals, including Huntington Bancshares in Columbus, Ohio, are reporting similar success.

Mellon Bank Corp. believes enough in the concept of the terminals that it has agreed to install them in all its branches.

As the experience of these institutions trickle out, they may convince other institutions that noncash terminals are worth their cost, experts said.

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