CoreStates Financial Corp. is moving to automate its credit evaluation for small-business lending.

The $27 billion-asset regional bank, based in Philadelphia, will use the 20/20 Small Business Lending System, developed by Appro Systems Inc., a Baton Rouge, La.-based provider of credit assessment products.

The system provides both "a jumping off point for improving customer service and turnaround time, and a data repository for future analysis," said Linda Weber, vice president and manager of retail risk technology at CoreStates.

She placed the cost of the client/server-based system, which will begin running some time this quarter, at around $250,000.

Used for small business credit application processing, the system enables the bank to collect and use information from data sources, such as credit bureaus and information from potential customers, to more efficiently make credit decisions, said Ms. Weber.

By merging the personal credit and financial profiles of a business and its owners, the system provides a complete and accurate profile, she said.

The software will run at the bank's main financial locations in Philadelphia, and Pennington, N.J., and also at its corporate and commercial credit card center in Wilmington, Del.

CoreStates' use of automation is in line with an overall trend within the banking industry to put technology to more strategic uses.

According to a 1994 survey on technology in banking conducted by Ernst & Young and the American Bankers Association, technology spending will grow from $16.35 billion in 1994 to nearly $20 billion by 1997.

Whereas in the past, most bank technology dollars went toward hardware replacement and maintenance, the study estimates that 21% of the dollars spent on technology in 1994 - or $3.4 billion - was spent on improving customer service and modernizing processes.

Ms. Weber said the new lending system provides for a number of productivity improvements. It allows the bank to house all small-business lending data in a central repository and to move application and regulatory document data electronically.

Procedures the bank used to perform manually, such as pulling credit reports, are done automatically by the system. In the future, the system will be upgraded to tap into other outside data, such as appraisals.

Ms. Weber said the system's client/server architecture will improve the bank's productivity because such systems "are generally more flexible, and easier to use" than mainframe and midrange systems.

"We can adapt the system to reengineer our workflow instead of changing our operations to fit the needs of the system," she said. "We can enhance the system to the way we need to serve our customers."

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