SAN FRANCISCO -- Call it D-Day in the inexorable advance of the personal computer in banking.

Computer industry overlord Microsoft Corp. and bank technology firm Newtrend are expected to unveil today at an American Bankers Association convention software that for the first time will let a small commercial bank run its entire operation on a network made up exclusively of PCs.

The new system, initially aimed at banks with assets under $100 million, employs socalled client-server technology, where groups of linked microcomputers share data and processing tasks.

Does Back-Office Work

Financial institutions both large and small over the past few years have been rapidly deploying client-server systems in their branches and executive suites.

But the system Newtrend and Microsoft are introducing is designed to perform back-office chores like maintaining customer data and demand deposit accounting, tasks that usually have been the bastions of mainframes and minicomputers.

Art Gillis, a community bank technology consultant in New Orleans, said that a few "startup, garage-type" companies have tried to sell client-server core accounting systems to small banks with little success.

"But two companies like Newtrend, which intimately understands how a bank works, and Microsoft, which understands the nerdy computer stuff, should be a formidable combination," he said.

The system also represents a major win for Microsoft's effort to push its latest PC operating system, called Windows NT, into banking.

A variant of the firm's now-ubiquitous Windows user interface, Windows NT is designed to maximize the power of networked PCs, while providing data security and systems-management capabilities previously available only on more expensive mainframe and midrange hardware.

Michael Rawding, Microsoft's marketing manager for financial services, said his company viewed the Newtrend system as "very important based on the fact that it is a core banking system and does represent a strong movement of Windows NT into the banking enterprise."

What It Can Do

Serge Beauregard, senior vice president of strategic technology at Newtrend, said the software, called the Client/Server Banking System (CSBS), would for the first time enable a sizable community bank to automate its entire operation using a network of PCs containing Intel Corp. microprocessors.

"It's clear the front office is going to Windows," Mr. Beauregard said. "By moving the back office into client-server, we can give our customers the ability to easily add whatever functionality they want without having to pay vendors" to upgrade their systems continually.

Mr. Beauregard said Newtrend would demonstrate the new system at the ABA National Operations and Automation Conference this week.

It will consist of an initial version of CSBS running on AT&T Global Information Solutions hardware that contains four Intel microprocessors running simultaneously. This new hardware design is called multiprocessing.

He said this hardware configuration was powerful enough to process all the accounts for a bank with over a billion dollars in assets, but quickly added that Newtrend would initially limit its marketing efforts to institutions with assets under $100 million.

"Right now, we only have the software with capabilities for a bank of that size," he said, adding that client-server software development needs to play catch-up with the advancements in hardware.

Despite the limits on the bank size in the beginning, Mr. Beauregard said that Newtrend will consider codevelopment arrangements with larger banks in order to modify the software for their use.

'Competitive' Prices

Newtrend and Microsoft officials declined to disclose specific pricing for CSBS, but Mr. Rawding said it would be "very competitive" with systems based on International Business Machines Corp.'s AS/400 midrange computers, the predominant host computer in smaller banks today, as well as with outsourcing arrangements.

CSBS is Newtrend's second PC client-server offering, following the introduction of a core accounting system for credit unions called Cube, which it has sold since early 1993.

Cube, which uses Microsoft's DOS operating system, was developed using transaction processing software from Prologic Computer Corp., a small Canadian firm based in Richmond, British Columbia. Prologic also developed a version of its software for Windows NT, which is now being used in CSBS.

"DOS has kind of outlived its usefulness," said Greg Hope, vice president and chief architect at Prologic. "Windows NT provides data accessibility, reliability, and security that banks require."

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