Banks purchased more than twice as many computers as they did "dumb" terminals for branch automation last year, a study has found.

According to the Mentis Corp., an Eden, Md.-based firm specializing in bank technology research, banks and thrifts added approximately 42,250 personal computers at teller positions and 44,460 PCs at platform stations last year.

These PC installations represent roughly 71% of all computer workstations installed at banks and thrifts in 1992. The remaining 29% of newly installed teller and platform workstations were terminals linked to mainframes or minicomputers. Unlike personal computers, these devices rely entirely on a bank's host computer system for their processing power.

Use in Teller Operations

While most banks have been buying PCs for their platform stations for more than five years, only recently have intelligent workstations begin to replace the dumb terminals for teller operations.

After growing relatively slowly in the late 1980's, the number of personal computers installed at teller stations grew by 46% in 1991 and 1992.

The main reason for the recent shift is that desktop processing power is becoming a must for many of the tasks that tellers are required to perform.

"Most banks see that the software to do the latest teller functions runs on PCs," said Gregory Schmergel, vice president of the Tower Group, a consultancy based in Dover, Mass. "Looking five years into the future, they've got to believe that dumb terminals are not going to give them the functionality they need."

One of the advanced teller functions that requires the processing power of the personal computer is electronic imaging of bank documents.

According to a recent Bank Administration Institute survey, about 80% of U.S. financial institutions are using or are considering some form of check imaging, which involves turning a paper check into a digitized image that can be easily stored and shared on a computer system.

While the cost justification for such systems relies mainly on improvements in the check] processing area, most banks also expect the technology to have an impact on a number of frontline operations, including the teller function.

The idea is to make images of cancelled checks available to tellers over their terminals, to expand the range of services that tellers can offer to branch customers.

Beyond imaging, experts said personal computers also help tellers to participate more fully in the sales process by furnishing them with information that allows them to recognize cross-selling opportunities.

"With PCs, you can have a truly empowered front line that can help expand a customer's relationship with the bank even while [the tellers] are doing their main job of processing transactions," said Nik Banerjee, director of retail banking with the Chicago-based Bank Administration Institute. "With dumb terminals, that's very difficult to do."

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