In an article last July we presented some strategies to prepare your organization for the emerging changes in operating platforms.

The most fundamental such change is the shift from midsize and mainframe computer systems to networked PCs based on an open architecture model and designed and deployed as client/server systems.

In the meantime, such systems have continued to evolve.

After much promise and delay, client/server core systems were installed in the first financial institutions in 1994.

Right now, these solutions are available only as an in-house option. But as the technology matures and the market deepens, you can look for service- bureau offerings soon - this year or early 1996.

Financial institutions with assets of less than $500 million are the primary targets for these first applications. If your bank fits that profile, your next systems evaluation should include a serious look at one of these new client/server options.

These systems, though slow in coming, may proliferate rapidly, given the pent-up demand for better management and customer information and the powerful flexibility offered by relational data bases. There could be as many as 30 to 40 installations in 1995 alone.

The vendors offering these new core technologies range from start-ups to Microsoft, the overlord of the software domain.

EastPoint Technology. This small, privately held company based in Bedford, N.H., originally developed a legacy system on the Wang platform. Its experience in building banking applications and its accurate anticipation of the evolution of systems architecture led the company to become one of the early developers of client/server core systems.

EastPoint's new system, Pulse 5.1, is built on experience with that original Wang system.

The system utilizes a Sybase SQL server and a Power Builder/Microsoft Windows client.

Twenty-seven integrated modules span core banking needs including customer information, loans, deposits, general ledger, ATM, cash management, budgeting and forecasting, and customer profitability.

Additional modules support proof of deposit, bulk filing, on-line teller, image processing, platform automation, voice response, and 24 hour fax-back capabilities.

EastPoint has four installed systems - for institutions ranging in asset size from $75 million to $350 million - and the company projects an additional 12 to 15 installations in 1995.

Perot Systems. This Dallas-based vendor brings significant financial and staff resources to this field.

Its core system, Pro-Banx, has been ported from the original legacy systems. It processes deposits and loans, and supports the integrated development of customer information files.

Pro-Banx has a relational data base that operates on the Unix platform, and adheres to an open system architecture.

Perot has one beta site running, but has made progress in establishing itself as a force to be acknowledged.

It recently announced contracts to install the Pro-Banx system in the coming year for:

*First National Bank of Tucumcari, N.M. ($82 million of assets).

*North Side Bank and Trust Co., Cincinnati ($220 million of assets).

*Southside State Bank, Tyler, Tex. ($337 million of assets).

Phoenix International. This small company has garnered a consortium of community bank holding companies and a hardware manufacturer to forge a new operating alliance.

Based in Maitland, Fla., Phoenix International impressed six community bank holding companies with a total of 26 banks so much that they provided the first $1 million in development capital for an ownership stake in the company.

Hewlett-Packard has also agreed to give Phoenix seed money, technical assistance, and computer hardware in return for a co-marketing agreement that for three years limits Phoenix's sales of software in North America to products that run on H-P computers.

What makes everyone so ready to do business with this upstart is that Phoenix's founder, Bahram Yusefzadah, first developed the Liberty banking system, a community bank core accounting system now owned by Broadway & Seymour Inc.

The new system, like the others profiled here, is a true client/server design using Unix-based host computers to connect to intelligent PC client machines using the Windows operating system.

Like the other systems mentioned, Phoenix's will use Sybase's data base management technology to provide more flexible information access and reporting. Phoenix has three installed sites and anticipates an additional 15 to 20 in 1995.

Microsoft/Newtrend. While the other system vendors mentioned above have pursued the Sybase and Unix-based approach to core applications, Microsoft and Newtrend have announced a core banking system based on Windows NT.

For Microsoft, this joint action provides an opportunity to demonstrate how robust and powerful its Windows NT 3.5 operating system has become since its less-than-stellar debut.

The new software, called Client/Server Banking System (CSBS), is initially aimed at community banking institutions with assets under $100 million.

Although Microsoft and Newtrend announced the system in June 1994, no beta site, delivered product, or announcements about future directions or products have been forthcoming.

Last fall General Motors' Electronic Data Systems Corp. acquired Newtrend. Tower Group, the bank technology analysis firm, has said it does not expect developments for CSBS to begin until 1996.

Others ramping up. Other vendors are at different stages of developing client/server products.

AT&T Global Information Solutions Corp. is building its own client/server product.

Milwaukee-based Fiserv Inc. - recognizing the irrevocable shift in the technology - is considering porting one of its current applications to a client/server platform.

Open Solutions Inc., a Glastonbury, Conn.-based firm, is installing its first products.

Other players to watch include Precision Computer and Dallas-based Banctec Inc.

You can expect the roster to become increasingly crowded as more vendors - seasoned veterans and farm-club upstarts - announce their own product developments in the coming year.

Regardless of the size of the organization, when it comes to client/server core systems, all the players are rookies.

Vendors must prove they understand banks' needs and can deliver products that meet them.

As with any new system design, they must demonstrate real-world reliability, measure performance against industrywide benchmarks, and prove they can provide security for data and user access.

Because this is an entirely new architecture, most vendors must balance service and support for existing systems with development of the new ones. Few organizations have the depth and resources to maintain this balance for long, and client/server vendors must demonstrate their commitment and staying power.

Client/server core systems are now a real option to consider as you develop your long-term strategic plan. The solutions we've seen so far are most appropriate if your organization meets the following profile:

*Institutional assets are $500 million or less.

*All aspects of the organization are committed to substantial change - technically, organizationally, and culturally.

*Your employee base is already PC-literate.

*You understand how to manage and operate local area networks.

*You're prepared for the inevitable delays, frustrations, and costs inherent in new system development.

*You are already actively engaged in reengineering and redesigning your business processes, and view new technology as a part of your overall effort to improve operational efficiencies and customer services.

Is there a new core system in your bank's immediate future? Finding the answer takes honest evaluation of your technical, financial, and cultural readiness to exploit the new technology. You don't want to be too timid, but you also don't want to be foolhardy.

Editor's Note: Last week's article in this series said Broadway & Seymour will soon introduce an IBM OS/2-based version of its branch automation product, Bancstar. Actually, the company already has six clients on its Bancstar Prism system, which uses OS/2.

Ms. Seymann is president and chief executive of M One Inc., a Phoenix- based consulting firm specializing in bank management and technology. Mr. Williams and Mr. Faulkner are managing directors.

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