The Office of the Comptroller of the Currency is evaluating how banks conduct their 401(k) businesses.

The purpose of the study is to increase the agency's awareness of the industry and ensure that banks are engaging in the best practices, said Lisa Lintecum, director for asset management.

The agency's findings have been general, and it is too soon to predict the impact on banks, said Ms. Lintecum, who spoke at last week's American Bankers Association conference on 401(k) plans. The study includes 22 large national banks under the OCC's jurisdiction.

"We'll decide what we're going to do once our research is complete," she said, adding that the OCC hoped to publish a white paper by yearend.

Nonetheless, the agency's attention to 401(k) plans is important because it could ultimately help banks avoid regulatory snags.

One of the topics the study addresses is the changing role of banks in the 401(k) industry. Citing a survey by Pensions & Investments, Ms. Lintecum said only two of the top 20 providers of 401(k) services are national banks: Barclays Bank PLC, New York, and Mellon Bank Corp., Pittsburgh.

Some banks are fleeing the business because costs are too high and profits are low, she said. Banks also face stiff competition from mutual fund companies.

At the end of 1997 banks administered 21% of 401(k) assets, compared with 28% in 1991, according to Spectrem Group, a San Francisco research and consulting firm.

Mutual fund companies, meanwhile, saw their share grow to 42%, from 21%.

Another challenge facing banks, Ms. Lintecum said, is the ability to offer clients the latest technology, which includes Internet capabilities and daily valuation of accounts. Gaps in technology will need to be addressed by building the capability internally, by forming alliances, or by acquisition, Ms. Lintecum said.

With technology changing every day, though, keeping up can be difficult. It "takes money, and it takes focus, and it takes commitment," said Stephen P. Cronin, director of retirement sales at Spectrem.

But now, unlike the mid- to late '80s, forming alliances with outside firms is not taboo. "It's not a dirty word to say you're outsourcing," Mr. Cronin said.

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