CVB Financial Corp., an $800 million asset bank based in Ontario, Calif., is testing a wire transfer system that it hopes will place it on a par with larger competitors.

The system, a Windows-based, client-server product called Fedplus, was developed by a San Francisco-based start-up company called Fundtech Corp. It was introduced recently at the Bank Administration Institute's Money Transfer Conference in New York.

Experts said the development of Fedplus and similar products is in reaction to rising demand by community banks for affordable wire transfer systems.

"No matter what type of volume you have, you need this type of software because everything is integrated into one product rather than using multiple products," said Elsa Zavala, vice president and director of data processing with Chino Valley Bank, CVB's lead bank and the system's beta test site.

The Fundtech system works in conjunction with Fedline, the communications service that links the Federal Reserve with banks, savings institutions, and credit unions.

Fedline is primarily a communications vehicle, but also has data entry capabilities that support automated clearing house transactions, wire transfers, and Treasury securities transfers.

Designed for small to midsize institutions, Fedplus improves access to Fedline terminals through an on-line interface. It also automates compliance with the central bank's funds transfer regulations.

It can read funds transfer requests from faxes and convert them into Fedline formats. It also has built-in verification for sources of the request. '

Fundtech president Ariu Levi said interest in his company's product indicates that the low end of the money transfer system has gone largely unserved.

Along with CVB, General Bancorp, a $1 billion-asset institution based in Los Angeles, has signed on to the system. 20 other institutions are looking at it, he said.

"It looks like he has defined a segment of the market for himself," one competitor said of Mr. Levi.

Other major software companies that provide wire transfer systems include Applied Communications Inc., Omaha, Intranet Inc., Newton, Mass., and Logica North America Inc., Waltham, Mass.

The pilot at CVB, which began last month, is slowly blossoming into a full-blown installation.

Ms. Zavala said CVB plans to roll the product out at 19 other branches in an effort to automate other processes, including wire transfer verifications.

Research and development of the client server system took two years, according to officials at Fundtech.

As part of its research, Fundtech polled more than 75 banks across the country to get a handle on customer needs.

The software's development by Fundtech was aided by an Israeli investment firm, which invested more than $3 million in the project. Such funding efforts are becoming more and more common, according to Mr. Levi.

"The old way of developing product, from the vendor's perspective, was usually to go find a couple of banks to fund it," said Mr. Levi.

But he said systems development projects would inevitably straggle as funding banks grew impatient with the amount of time being taken.

Mr. Levi said, "the next thing you know, they are strapped with some product that takes five years to complete."

Another trend in the software development business is the alignment of software developers with major software vendors.

"We are no longer identified with a hardware vendor but with a very strong software vendor, namely, Microsoft," Mr. Levi said.

Fedplus costs between $3,000 and $5,000 monthly for the turnkey operation, including hardware and software, said Mr. Levi, who noted that prices vary according to the system's configuration.

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