COMMUNITY BANKS are expanding their use of personal computers at a faster rate than the banking industry as a whole.

Executives at community banks around the country are discovering the many benefits of PC technology: better, faster customer service, increased product sales opportunities, more useful and more timely management reports, and more.

The annual survey of technology in community banks, sponsored by American Banker and the Tower Group, found that small banks have increased their use of PCs 13% in the last year. By comparison, the banking industry as a whole increased its PC usage only 9%.

The survey of chief executives at selected bank holding companies with less than $1 billion of assets also found that the percentage of PCs connected to a local area network grew from 31% in 1993 to 50% this year (increasing the number of machines from 31,930 to 58,430).

"We are only limited by our imagination in the use of a personal computer," said A. Hartie Spence, president of Louisiana's Calcasieu Marine National Bank of Lake Charles, who added that he would not know how to run a bank without a personal computer.

"The greatest barrier we have when it comes to the using the personal computer is the ability to train our people on how to use the machines in the most efficient manner and get the most out of the technology," he said.

The $900 million-asset bank has found that the personal computer has added greatly to its ability to cross-sell products and increase its level of customer service.

"The PC has provided us with the tool to cross-reference data, to increase our contact to customers and our ability to reach potential customers with new products," said Mr. Spence.

"The future of the operation will be in our ability to go out into the field to open new accounts and work with customers for loan origination," he continued.

Mr. Spence said the bank has increased its productivity through the use of electronic mail - a byproduct of PC installation.

"E-mail is the finest labor saving tool we have; it has allowed us to get things done quicker and operate more efficiently," he said.

Before the bank started using electronic mail, management often sent memos through interoffice mail and often did not get responses for 24 hours.

In some cases, management was not always able to track the memos or ensure that they were properly routed.

"By using E-mail, we get the information out instantaneously and what used to take 24 hours now can be done in 10 minutes," Mr. Spence said. "We are also able to ensure the right information gets to the right person without having to worry about routing or delays in delivery."

Calcasieu Marine is currently using dumb terminals at teller stations but plans are under way for the installation of a branch automation system that will link the branches to the bank's network through PCs.

"We would like to have the entire bank on a network," said Mr. Spence."Our branch automation plan will move us closer to this goal."

Likewise, Bank of Granite Corp. has been doing more to use the PC in its operation.

However, the Granite Falls, N.C., bank still relies greatly on its mainframe for back office and data processing needs.

"It is very difficult for us to keep up with the changes in technology," said chief executive John Forlines Jr."The costs have become very prohibitive, but we are expanding the use of personal computers and will continue do so in the future.

"The PC has allowed us to increase the level of service and the efficiency of our operation," he continued."We are in the business of servicing people and technology specifically. The PC is one tool that is helping with our success."

The bank is on the verge of installing a platform automation system, said Charles Snipes, president of the $397 million-asset holding company's lead bank.

The system will tie all of the bank's locations together and allow it to respond more quickly to customers' needs.

"The personal computer is a obviously a key part of the network and we believe that by installing the machines on all of the desks [we can make] the operation... more efficient," he said."The personal computer is a vital part of the operation, and we know that the only way for us to be competitive is to move toward technology and make it work for us."

The Mechanics Bank of Richmond, in California, has found that personal computers have become"an integral part" of its operations.

"We started using PCs five years ago to get information from the mainframe, and have expanded the use to a variety of areas," said executive vice president Robert Snelling. "By expanding the use of the technology, we can have a totally integrated system with workstations that will be linked to each other - allowing us to provide better service and make the operation work better."

The $850 million-asset bank is installing a platform automation system and integrated teller line system and plans on having all of its tellers linked by next year.

Middletown Valley Bank in Middletown, Md., is not building PC networks, but it is using PCs for some of the"nuts and bolts" applications of its operation.

Chief operating officer Lisa Kilgour said the $100 million-asset bank is too small to benefit from the use of networks, but has seen a lot of benefits from the personal computers in other areas.

"We use PCs to drive our automatic teller machines," she said."PCs provide us with all the information we need to conduct transactions and work with customers to issue cards when they open accounts."

The bank is also using PCs in its report retrieval and data storage operations.

Middletown Valley uses personal computers as a link to its mainframe to extract customer information. Customer statement information is stored on optical disk.

"The optical disks allow us to have quick access to customer information," Ms. Kilgour said."Before, we used to print duplicate copies of the statements, send one to the customer, and store a paper file for a year. Now we have all of the information on disk, which saves us space, paper, and time."

Heritage Bank of Blue Island, Ill., has been using PCs for 10 years.

"We see the personal computer as a tool to keep in touch with our customers," said Ronald Groebe, executive vice president.

He said the bank is becoming more and more automated and is using the PC to increase business both from existing and new customers.

"We are trying to develop the customers we have and get more from them," he said."By using personal computers, we are able to have all of the customer's information in front of a personal banker and work with the customer to meet their needs. It allows us to use technology to work with them on a personal level.

"The only way we can continue to grow and remain competitive is to increase the use of technology in our operation," he continued. "The key is to make sure we get the most out of it."

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