Olin Broadway, a founder of one banking software firm and co-founder of another, has now formed a third.

Sonata Systems Inc., based in Charlotte N.C., will update community bank branch software it bought from an earlier venture of Mr. Broadway's, Egret Holdings.

Sonata, which was formed last month, bought the software this month. Mr. Broadway, its president, founded Broadway & Seymour and Egret.

He said Sonata is improving the way Lundy-FMS, a 10-year-old software package from Egret, accommodates alternative delivery services.

The improvement is necessary, he said, because "the great majority of community banks are already looking to offer home banking."

About 250 banks use the Lundy software to run their branches, down from as many as 400. Mr. Broadway said some users dropped out because the package had become outmoded.

Sonata has already added features to the software and improving the way it sorts customer data, Mr. Broadway said.

Sonata executives said they expect to have improved its networking abilities by August. It is currently based on an outdated local area network structure.

And by yearend, the system should be running in the Microsoft Windows environment, Mr. Broadway said.

Though building Sonata on an existing product line and customer base is almost certainly easier than starting from scratch, experts noted that upgrading systems is complicated.

"The problem with revamping any product is that you never change the architecture," said Bahram Yusefzadeh, chief executive officer and president of Phoenix International, a provider of community bank software that could compete with Sonata.

"Most products don't have infrastructure to deal with the needs of today," he said.

Phoenix, based in Maitland, Fla., has a client-server-style branch automation system that runs in 17 banks.

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