First Union Corp. has launched a national telephone banking service.

The new service assigns customers a personal banker and offers virtually every banking service available at First Union's 1,300 branch offices, mainly in the Southeast.

First Union's effort, which assumes that customers will use automated teller machines for cash-related services, pushes alternative delivery channels to do the task for which they were created: routing customers away from branches.

"Customers, whether they live in New York or California, will receive high-quality, personal service for all their banking needs without ever having to walk into a bank branch again," said Jill Andrews, First Union vice president and head of the new telephone service.

"The combination of 'high tech' with 'high touch' is what will make this service valuable to our customers, and successful for the bank," she said.

Operating through a toll-free number, the bank's "telephone branch" enables customers to open demand deposit accounts, transfer funds among accounts, obtain credit cards, and apply for a variety of other credit products, including mortgages and auto loans.

By yearend, phone customers will also be able to buy a variety of investment products, including mutual funds and annuities.

The telephone branch is an outgrowth of the bank's telephone-based "relocation service," which was introduced last year, said Ms. Andrews. This service helps customers who are moving to transfer their accounts to a First Union branch in their new location.

Customers responded positively to the relocation service, so the bank decided to expand the idea to include other banking transactions.

Based on First Union's own research, said Ms. Andrews, about 15% of the population would like to bank over the phone, so the company wanted to make sure this option was available.

The company hopes that the convenience of the service will attract customers both from within and outside the areas covered by its branches, she said.

To use the service, customers must call a central telephone center in Charlotte, N.C., where eight "sales specialists," or personal bankers, and a number of backup telephone representatives field calls.

Each customer is assigned a personal banker for the duration of the relationship, allowing agents and customers to become familiar with one other.

"The relationship may not be in-person, but it's very personal," said Ms. Andrews.

Although a customer is assigned to one banker, any of the 24 telephone representatives from the relocation service - acting as backup agents - can handle a call. The bank's sophisticated customer information system enables agents to call up a history of the customer's relationship, said Ms. Andrews.

The telephone branch, opened in March, is expected to handle fewer than 10,000 customers in its first year, said Ms. Andrews. The company hopes to double that total each succeeding year.

The telephone branch is the latest in a series of alternative delivery initiatives First Union has launched in order to give customers "anywhere, anytime" banking. In recent months, the Charlotte-based superregional, with assets of about $78 billion, has also introduced a "virtual marketplace" on the Internet for home shopping.

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