Many bankers see the so-called dumb terminal as part of a vanishing era of mainframe systems, a remnant of an electronic Stone Age that has already lost its evolutionary race with the vastly more powerful PC.

It is commonly perceived as inflexible and critically limited in functionality, not because of any inherent deficiencies of its own but because of the inflexibility and restricted capabilities of the legacy systems that currently drive it in most banks.

By contrast, the PC is perceived as "smart," especially when combined into networks with powerful, inexpensive servers that have already demonstrated the ability to handle mission-critical banking applications at far lower cost than mastodon mainframes.

It is not surprising that PC-based client/server networks have become the solution of choice for many branch automation applications. The inexpensive processing power and fast-growing inventory of productivity- boosting applications make the PC look like the ideal selection far every workstation role.

It isn't.

For many branch automation jobs, particularly teller applications, the use of stand-alone, programmable PCs represents both financial and technical overkill.

Indeed, the use of PCs in these roles may actually increase data and financial security risks without conferring any real offsetting benefits. In these cases, a bank may actually be much smarter to incorporate dumb terminals into its branch automation strategy.

The first and most obvious consideration is expense. While PC networks can represent substantial savings over mainframe-based solutions, they can still be expensive to install and maintain compared with modern terminal/server networks. In terms of initial outlay for hardware, a PC workstation can easily cost several times as much as a terminal. Software and licensing expenses can make the installation cost differential even more disproportionate.

This difference in installation costs may be minor compared with the differences in network maintenance and administration costs over time. A respected bank consulting firm recently estimated that annual support costs for a 25-seat PC network would run about $4,700 per seat, versus about $2,200 for a comparable terminal-based network. Bear in mind that these figures represent annual savings over a projected five-year period.

These cost comparisons assume that a bank is installing its terminal network from scratch. For many banks with large existing terminal and peripheral inventories, the savings would be even greater. New products and methods enable these institutions to replace outdated branch controllers with powerful, inexpensive PC servers that can give all the new capabilities a bank requires to its dumb terminals.

As impressive as these savings may be, they may not represent as strong a case as security considerations. Terminals are generally far easier to control and protect than PCs. As a programmable, independent device, a PC represents an order of magnitude increase in security complexity and exposure. It is obviously easier to introduce unauthorized programs or data through a PC than through a terminal.

PCs also greatly increase opportunities for transmission of viruses. Even the most loyal and best-intentioned employees may succumb to the temptation to run their own tax programs or type a spouse's term paper during lunch hour. And they will be using potentially-infected diskettes from home when they do so. Software exists to disable floppy diskette drives on networked PCs, but the mere presence of such entry devices constitutes an additional level of administrative concern.

Of course, all these arguments might be academic if the bank actually needs each user to have the stand-alone data manipulation and programming power of the PC for mission-critical roles. But many network seats really do not require these capabilities.

Most teller positions, for example, require only the ability to access account information and process strictly defined transactions. The teller will have little need for personal productivity functions such as word processing or presentation programs, which are most efficiently handled on an individual PC workstation. And many cross-selling functions, such as notifying a teller that a customer's balance has become large enough to qualify for a more desirable product, can be more readily and efficiently processed on a server than on a workstation PC.

For many roles within the branch, the choice of dumb terminal workstations driven by powerful PC servers represents the best of both worlds: cost-effective client/server architecture and full functionality combined with enhanced security and greatly reduced capital and operating costs. Given these advantages, bankers may want to consider including dumb terminals in all their branch automation plans. It could be the smartest thing to do.

Mr. Ezelius is president and CEO of Network Controls International Inc., a Charlotte, N.C.-based provider of branch automation systems.

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