As part of a major reengineering initiative, National Penn Bancshares is installing an integrated loan origination and platform automation system that is expected to increase productivity and improve cross-selling.
The Boyerton, Pa., bank is installing the Pedestal system from Formation Technologies Inc., a Harland company.
The PC-based software consists of a number of integrated applications that will allow the bank to handle loan processing electronically and to automate a number of tasks on the deposit side, resulting in streamlined operations, according to bank officials.
National Penn expects to complete its installation of the system by January 1996.
William H. Sayre, vice chairman of the $1.1 billion-asset bank, said that Pedestal is a cornerstone of National Penn's new information technology strategy.
The bank's goals are to eliminate paper by performing many tasks electronically and to avoid duplication of labor - employees from different departments keying in the same information.
To accomplish these objectives, the bank is replacing so-called "dumb" branch terminals - which rely on host computers for their processing power - with 486-type PCs running Pedestal.
The bank's existing PC network, located at the main office, is being expanded to a wide area network that will link the 40 branches.
Mr. Sayre said the project is "a substantial investment for a bank of our size, but the payback will be significant."
Much of the savings will come in the form of what Mr. Sayre referred to as "soft" payback, such as reducing the amount of time it takes to do certain functions.
Through one Pedestal application, for example, branches will be able to upload information to the bank's mainframe core processing system.
This will replace the current manual process, in which the bank's branches send information by courier to the data center, where it has to be entered into the mainframe. This often causes the same information to be entered by different departments, which increases the potential for errors, said Mr. Sayre.
"With Pedestal, we will be able to eliminate unnecessary steps in the back room," he said. "As a result, we can redeploy bank staff to more productive functions."
Through the automation of loan processing and account openings, the system will enable branch personnel to be more sales and customer focused, he said.
The Pedestal software helps ensure compliance with all state and federal regulations in the taking of applications - which can be done at the branches or remotely, using laptop computers.
The applications will be electronically forwarded to the bank's central underwriting location at the main office. The system also provides electronic access to major credit bureaus.
Initially, the system will handle consumer loans. The capability to process commercial loans will be added in 1996.
One of the main benefits of the system, said Mr. Sayre, is that it will allow the bank to build a data base that captures customer demographics and employs expert system logic for target marketing of products and services. This will enable the bank to significantly improve cross-selling opportunities, he said.
The platform automation system will eventually be used to automate processing at a number of supermarket branches the bank intends to open this year, Mr. Sayre said.
National Penn is currently using Formation Technologies' LoancalcII for consumer loan origination. This system will be customized and integrated with Pedestal.