Making a bid to join the vanguard of companies seeking to build the next generation of consumer banking technology, Olivetti North America Inc. is close to delivering a branch automation system using an open-systems design.

The new system, called Mosaic, is an ambitious multimillion-dollar effort by the U.S. subsidiary of Italian technology giant Olivetti S.p.A. to regain the lead in a rapidly changing market.

The unit, formed when Olivetti acquired Bunker Ramo Corp. and ISC Systems Inc. in 1988 and 1989 respectively, has been a major player in the branch systems market.

In the 1980s Bunker Ramo and ISC installed the first bank branch systems to use microcomputers for teller and platform workstations. The systems relied on proprietary operating systems that were specific to the vendor selling the hardware.

Mosaic uses an open-systems approach, based on standard operating systems like Novell Inc.'s Unix and Microsoft Corp.'s Windows, and adopts client-server computing, whereby networks of personal computers share processing tasks.

Tom Oxendine, executive vice president of systems at Olivetti North America, said Mosaic was developed because banks are rethinking their approach to automating-branches, along with other retail delivery systems such as telephone customer service centers.

"The same activities that go on in branches need to be replicated in telemarketing and customer service in order to have a consistent customer experience." he noted.

"Mosaic brings together a completely open platform with a full graphical user interface development environment." Mr. Oxendine said.

"It allows banks to develop applications they need for the new banking model; that means a sales and counseling approach that they need today."

He added that by using Unix and Windows, Olivetti is providing bankers with the ability easily to modify their retail software, as well as to pick and choose from the thousands of third-party application software packages already written for the operating systems.

Mr. Oxendine said two financial institutions will begin testing Mosaic next month. He declined to name them, but described them as "a very large bank and midsize institution with about 150 branches." He said if the tests are successful, Mosaic will become generally available by yearend.

The first version of the system will consist of Unix-based computer servers that route data between platform and teller workstations running Microsoft's Windows NT operating system, a souped-up variant of the original Windows.

By the first quarter of next year, Olivetti will release a version of Mosaic that uses Windows NT on branch servers, with the yet-to-be released Windows 4.0 - known by PC aficionados as "Chicago" - as the client operating system.

Microsoft officials have said they expect banks to use Windows NT mainly for servers. and occasionally on desktops for power users.

Mr. Oxendine said they agreed with that assessment. "We feel that NT will be the operating system for high-end workstations, but in general the workstation of choice will be Windows 4.0."

Olivetti officials said they will have invested over $20 million in 1994 on research and development, and Mr. Oxendine said most of it has been going into Mosaic.

"We're also putting a lot of money into self-service devices, but Mosaic is the system that we will offer to glue all the parts of retail delivery together."

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