Interchange State Bank, Sadle Brook, N.J., has started to offer an electronic telephone banking service to customers in an effort to provide customers with "the best of both worlds" when it comes to service.

Interchange, whose name derives from its location - Interstate 80 and the Garden State Parkway - found customers were seeking alternative access routes to account information and determined that offering telephone services was the best solution.

"Many of our customers expect to be able to use technology to get answers while others want to work with us face to face," said Anthony Abbate, the $459 million-asset bank's president and chief executive. "By offering this application we can satisfy all of our customers' needs while continuing to provide them with a high level of service."

The service, called In Touch Banking, allows customers to make basic banking inquiries and transactions free of charge via touch-tone phone 24 hours a day, seven days a week.

"We believe that this program will be regarded as a tremendous resource and convenience by area residents," said Mr. Abbate. "Our market research has determined that customers find it reassuring that they can access their accounts whenever and wherever the need arises."

Customers are given access to the system through a toll-free number. To insure confidentiality and account security, the system assigns each customer a personal identification number as well as an access number.

Potential customers are able to access the system to get rate information for loans, certificates of deposits, and savings and checking accounts. The system also provides "on-the-spot" loan payment calculations for potential barrowers.

Richard Crone, a senior manager at KPMG Peat Marwick, said that offering 24-hour telephone access is the first move every community bank should make as it looks to the future of providing service.

"Using a telephone system allows smaller banks to compete anytime, anywhere with big banks without having the bricks and mortar in place," he said. "Community banks have little to lose and everything to gain from utilizing the technology. It is very unlikely that they are going to cannibilize their existing customer base because the technology allows them reach out beyond their traditional geographical scope."

Interchange went live with the system in November and is currently receiving more than 100 calls a day. The system operates through software from Information Technology Inc. of Lincoln, Neb., on the banks's Unisys Corp.'s A series mainframe which is linked to a network of 486-type personal computers running telephone banking software from Dallas-based Intervoice Inc.

"Offering convenience is the key to the future of our business and we think this service provides the answers customers are looking for in their busy lives," said Mr. Abbate.

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