Bank technologists are increasingly embracing personal computer software from Microsoft Corp., called Windows, that promises to make the machines easier to use.

Windows software is now being used on nearly a quarter of the 766,000 microcomputers in banks, a figure expected to rise to 31% of 1.2 million micros by 1995, according to the 1992 American Banker/Ernst & Young technology survey just published.

By contrast, IBM's rival OS/2 operating system runs on only 4% of banks' micros, a total expected to rise to 15% in three years.

A Battle with IBM

The groundswell of support for Windows is a coup for Microsoft, which is battling International Business Machines Corp. for dominance of the next generation of desktop computers.

"Windows is winning because it's the software that users are accepting and endorsing," said Will Fastie, personal computer software analyst at the investment firm Alex. Brown & Sons in Baltimore.

Windows and OS/2 are essentially upgrades to the DOS operating system software used on most personal computers since the 1980s.

Users have often had trouble using DOS because it forces them to learn relatively arcane commands, and only does one thing at a time.

By contrast, Windows and OS/2 take advantage of the greater processing power of the newest personal computers to make the machines more user-friendly. they do this with so-called graphical user interfaces that are easier to understand than DOS commands.

OS/2 also has a capability called multitasking that enables a personal computer to do many things at once.

Also, DOS and OS/2 are embracing a new technology called 32-bit processing, which promises much faster computing.

The graphical user interfaces on Windows and OS/2 are similar to those that have been available for several years on Apple Computer Corp. Macintosh microcomputers. But Macs are not widely used in banks.

Though Windows and OS/2 are initially more expensive than DOS, users of these systems needs less training and support than DOS users, Mr. Fastie said.

Additionally, Windows and OS/2 users tend to do more with their personal computers than DOS users.

For a typical corporation, the long-term operational cost for Windows and OS/2 should be much less than for DOS alone because of reduced training and support requirements, Mr. Fastie said.

Banks moving to Windows are eager to reap these benefits. Among them is Peoples Bank of Bridgeport, Conn., which is planning to spend just under a million dollars over the next few years to install Windows on most of the 800 personal computers in its head office, said Thomas Jagodzinski, first vice president for computer and check processing operations.

Currently, nearly all of these machines run DOS. Most are used for electronic spread sheet and word processing applications, while about a quarter are hooked into local networks and run systems for such things as property management.

Mr. Jagodzinski said the migration to Windows is worth it, because "compared to DOS, Windows is easier to use and has better functionality."

Rationale for Choice

He added that Peoples Bank chose Windows over OS/2 because more applications are available for Windows, principally because of Windows' greater popularity in the industry.

But Cecil Smith, senior vice president of data processing and operations at Wachovia Corp. in Winston-Salem, N.C., bank still isn't sure which personal computer operating system to migrate to.

The reason, Mr. Smith said, is that neither Windows nor OS/2 has yet established a dominant position in the market.

"The whole user community is confused as to what the appropriate, sound direction is because the technology has not yet shaken out," Mr. Smith said.

He added that Wachovia was testing OS/2, Windows, and Unix to see how well each system performs.

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