Citibank has licensed software from Sanchez Computer Associates Inc., a software developer that plans to introduce its core processing software to banks via a back door-as a support for remote banking applications.

A Citibank spokesman said the bank plans to use the Profile/Anyware software to handle processing for deposit and loan products, but he declined to give further details. He would not disclose the exact size of the multimillion-dollar deal.

Recent agreements that Malvern, Pa.-based Sanchez has struck may provide some insight into the company's strategy for selling its software to large banks. Sanchez, with $28 million in 1997 revenues, faces the dilemma of targeting core processing software to large institutions with resources tied up in mainframe systems.

It positions its software as a support for one aspect of processing- usually for banking services offered through remote channels, such as the telephone or PC. The expectation is that the software's usage throughout a single bank will spread.

Citibank's contract builds on one Sanchez signed a year ago with Citibank Canada to use Profile/Anyware to handle core processing for retail banking and personal computer-based banking channels.

Similarly, Netherlands-based ING Group began using Sanchez's software to support its telephone-based "direct bank" launched in Canada, which now has more than $1 billion of assets.

Subsequently, an ING subsidiary, InterAdvies, signed a $10 million-plus contract for Sanchez to supply the banks' core processing. Now ING plans to use the Sanchez system in its operations in Hungary.

Sanchez's system "offers the ability to implement the direct-banking approach to any market anywhere in the world quickly," said Grant MacKenzie, vice president of credit in ING's direct bank in Canada. His company was able to begin running Sanchez's core processing system in just three months, he added.

"When Sanchez begins these relationships, they end up growing over time," said Charles Wittman, an analyst at Wheat First Union in Richmond, Va. The system "allows banks to create myriad different financial products that enable them to compete more effectively against the brokerage houses."

He cited 67-day certificates of deposit as an example of the kind of customizable products the Profile/Anyware can produce almost instantaneously.

"Ultimately banks can tailor products to an individual or an affinity group," said R.J. "Zap" Zlatoper, chief executive officer of Sanchez. The software's multilingual and multicurrency capabilities make it particularly suited to global financial institutions, Mr. Zlatoper said.

More than 350 institutions, including some that have upgraded from a previous system, use different versions of the company's three-product software suite: Profile/Anyware, introduced in 1996; Profile for Windows, a graphical branch management system; and Profile FMS accounting software.

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