Downey Savings and Loan Association, Newport Beach, Calif., has invested $1.5 million in a high-speed telecommunications network using technology and standards developed by AT&T.

Downey, a $4 billion-asset institution, is installing a switched multi-megabit data service, or SMDS, to link all 52 branches and 1,000 PCs.

The network, developed by Bell Communications Research, the research arm of AT&T commonly known as Bellcore, gives bank employees the ability to send vast amounts of information to each other electronically. Handling 34 million bits of information per second, it supports a wide range of bank applications, including funds transfers and document imaging.

Downey said it expects the network to reduce the costs associated with handling paper documents, such as loan packages and daily reports.

The thrift also looks forward to increased productivity.

"We expect it to posture us for the future of banking, which we envision as getting services out to the customer rather than acting as a financial intermediary," said John Dann, vice president and manager of distributed processing at Downey.

"This will allow us to respond very quickly in getting new products out to the customer, which will increase productivity and save us money," Mr. Dann said.

Downey worked with San Francisco-based Pacific Bell to develop the network software and interfaces. The thrift will use the phone company as its major network service provider.

Internally, the network connects PW 500 personal computers from Unisys Corp., Blue Bell, Pa, with a Unisys AI2 mainframe.

Dick Shimizu, product manager at Pacific Bell, said the network's open systems architecture -- which is compatible with a wide array of computer platforms also paves the way for easy connections with outside systems, such as those run by mortgage brokers, the district Federal Reserve bank, and other government agencies.

"Most banks tend to have very private networks, but [the network at Downey] is ideally suited for networking with others," Mr. Shimizu said. "We give them the capabilities to do that."

The network replaces an analog transmission line that Mr. Dann said was "adequate for transaction traffic" but incapable of the tasks required to stay competitive.

"We knew that, from a business perspective, speed would be the operative," Mr. Dann said. "It was obvious that we needed to extend other applications out to the branches, so we had to look for other means."

Downey completed a successful pilot in May and is now in a systems integration project that will connect the branches by next June.

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