Microsoft Corp. has broken into the banking industry's Top 50 with its Windows NT operating system for retail banking.

Attacking a historical stronghold of International Business Machines Corp., Microsoft plans to announce today that Crestar Financial Corp. of Richmond, Va., is the first U.S. commercial bank of its size to deploy Windows NT throughout its branch network.

Crestar has already converted its 400 branch servers in Virginia, Maryland, and the District of Columbia from IBM's OS/2 operating system.

The bank also expects to have Microsoft's Windows 95 operating system on 1,800 branch-platform workstations by the end of August.

Microsoft's aggressiveness in selling desktop software has some bankers concerned it is after the home banking market. Yet the Redmond, Wash., software giant is easing more and more of their core computer functions toward its Windows technology.

The $22 billion-asset Crestar, the 34th-largest banking company, may only be the first wedge Microsoft is driving into the industry's top tier. Citicorp, Chase Manhattan Corp., and NationsBank Corp. have been deploying or are testing the Windows operating system at branches or call centers.

Mentis Corp., a Durham, N.C., research firm, has projected that 53% of banks with deposits exceeding $1 billion will be running on Windows NT by yearend 1998, up from 8% at yearend 1996.

Attempting to refute the empire-building charges, Microsoft stresses its role as a "core-technology" provider that relies on other developers to implement the systems banks buy.

Michael S. Dusche, Microsoft worldwide financial services industry manager, called the Crestar commitment "momentous. It most importantly validates our business model that no one manufacturer can provide the hardware, systems software, and applications software, so there's a definite need for partnerships."

Crestar's direct supplier is Argo Data Resource Corp. of Dallas, a Microsoft CSD, or certified solution developer. Argo's BankPro software is also in use at NationsBank, Barnett Banks Inc., BankBoston Corp., and CoreStates Financial Corp.

"When Crestar decided to go with a teller automation system, it also wanted to move to the Windows environment," said Bala Shagrithaya, vice president of systems at Argo. "Essentially, we are re-using all of the applications we developed for OS/2."

This is the first BankPro implementation on Windows NT, which Mr. Shagrithaya said is "a more scalable and dominant operating system. We see most of the new implementations being NT-based as opposed to OS/2-based."

Crestar is also piloting Argo's BankPro with Windows 95 at teller workstations, connected to the same Windows NT server, at five branches.

All 2,000 teller stations are to be upgraded by the end of the second quarter next year. A related project, computer-telephony integration in call centers, is to be concluded in mid-1998.

"Windows 95 is our corporate standard as we move to link more branches together in a wide-area network," said David Holman, Crestar senior vice president of branch operations.

The bank worked "in partnership with Argo and Microsoft to be the initial deployer of an NT-Argo solution," said Mr. Holman. "We thought a long-term solution would achieve stability and the necessary internal compatibility. NT was the one to go with."

Mr Holman said by the time Crestar has upgraded all its servers and workstations, it will have invested $15 million to $20 million in Windows NT.

"Crestar is taking advantage of an operating system that lets it build one set of applications for the branch, call center, lending, and Internet banking," said Mr. Dusche. "What we offer is clearly substantially cheaper than proprietary systems."

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