SAN FRANCISCO -- First Interstate Bancorp and Hogan Systems Inc. announced that they are working jointly on a massive branch automation project.

First Interstate has agreed to be the first institution to install Hogan's new Branch Platform System. The Los Angeles-based bank company has more than 1,000 retail locations in 13 western states.

The agreement was announced here this week at the National Operations and Automation Conference of the American Bankers Association.

Taking Client-Server Approach

The retail systems project, one of the biggest under way in the United States, is also noteworthy in that it will employ socalled client-server computing, whereby networks of personal computers share data and processing chores.

Hogan and First Interstate officials declined to specify the deal's value but said the total cost of hardware and software would run into the tens of millions dollars.

First Interstate is the latest in a string of big banks that have recently committed themselves to revamping their branches, particularly sales and account-opening functions, with client-server technology.

Citicorp, Wells Fargo & Co., and Banc One Corp. are all installing PC-based branch technology that technologists claim will let bankers quickly identify customer needs and measure product and branch profitability.

Banks have been using PCs in their branches for a number of years now, but those devices basically acted as so-called dumb terminals when connected to a financial institution's host systems.

In contrast, Hogan's client-server branch system lets customer data be stored at the branch, bypassing communication with mainframes, said Walter R. Tallent, director of branch automation marketing at Hogan.

"With client-server, users have a tremendous amount of flexibility as to how they want to tailor their products for certain regions," he said, adding that that was a major requirement from First Interstate, due to its geographically dispersed business.

Kevin O'Byrne, vice president at First Interstate's technology services unit, said branch employees will be equipped with PCs running Microsoft Corp.'s Windows operating system, the graphical user interface that controls a PC's basic operation.

The PC "servers" that will be installed in every branch are slated to run International Business Machines Corp.'s OS/2 operating system and data base software.

Mr. O'Byrne said that, despite its initial selection of OS/2 for running its branch servers, the bank company is still evaluating competing products, such as Microsoft's Windows NT operating system.

"One of the things that attracted us to the Hogan software is its open architecture," Mr. O'Byrne said. Hogan officials said they plan to release versions of their branch software for Windows NT and Novell's Inc.'s Netware server operating systems.

The first version of the Branch Platform System, to be commercially available by year-end, automates all parts of branch sales, plus thhe account-opening function for deposit products, Hogan officials said.

Mr. O'Byrne said First Interstate would begin pilot-testing the Hogan system in the third quarter, with rollout into the branch network in 1995.

Mr. Tallent said pricing for the Hogan software starts at $1,100 per branch workstation, with discounts based on volume purchases.

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