IN SPITE OF THE ballyhoo about home banking services, few community banks have decided to offer customers more than touchtone access to bank account information.

That's a sensible course for smaller banks whose customers generally aren't yet interested in most remote banking services, said Dana S. Briggs, senior vice president at the Sandwich (Mass.) Co-operative Bank.

The $300 million-asset institution took its first step into home banking three years ago by adding a touch-tone telephone processing system. Customers, who get five free account accesses per month, now use the system frequently to check balances or make transfers between accounts, Mr. Briggs said.

"We went into touch-tone access to account information as a convenience offering," Mr. Briggs said. "We felt it would be beneficial, but it isn't necessary."

With a customer base that is largely retirees and with few competitors offering home banking services, Sandwich places its priorities elsewhere, Mr. Briggs said. Offering direct access by computer or through cable television systems does not appeal to enough customers to warrant more attention for now, he said.

As new systems are developed and tested by bigger banks, The Sandwich Co-operative Bank will watch for them to gain wider consumer acceptance, Mr. Briggs said.

Mr. Briggs' attitudes fit closely with those of the majority of respondents to the annual American Banker survey of community bank technology.

According to the Tower Group-conducted survey, the most commonly offered homebanking system was touch-tone telephone processing. Of those responding, 30% reported having a system in place and 12% were working to install a system. But the incidence of banks venturing into other types of home banking was much lower:

* Just 5% offer customers direct-access using a personal computer, although another 19% plan to add such a service.

* Only 8% have completed a voice processing/recognition system, with 12% in the process of adding such a service.

* None had or plan to have access via televisions, telephones with screens, or smart-phone systems that offer more elaborate choices for following loans, investments, and automated teller machine transactions.

* None of those surveyed offers account access through commercial on-line services like Compuserve or Prodigy - and only one planned to add such services.

Tower Group consultant Deborah Williams, who compiled the survey data, was not surprised by the results.

Touch-tone processing is popular because it is relatively inexpensive to install and customers take to it readily, she said.

More sophisticated offerings, like smart phones and direct personal computer access, require much more customer education, staff education, and expensive hardware and software. These act as roadblocks to the typical community bank.

Many community bank executives are likely to ask themselves if they really have the resources to make a full-blown home banking program work, when many of the bigger banks have problems with home banking services.

Community banks needn't tear out their hair over most of the more sophisticated services because they have less need for them, said Frederick A. White, principal with First Annapolis

Consulting in Maryland.

For now, most bank customers aren't interested in dialing up thee bank on a personal computer to access information. Mr. White cited himself as an example; though he can dial up his bank account on his personal computer, he doesn't see any reason for doing so.

"There are computer nuts that would like to do that," he said. Still, most banks have only a few such "nuts" as customers, he added.

William T. Gregor, a senior vice president and director with Gemini Consulting Inc., Cambridge, Mass., agrees. He also believes that not offering touch-tone service isn't a competitive disadvantage yet. Unlike automated teller machines, which he said are needed to be competitive, touch-tone service does not yet have widespread use.

Most home banking services could just drain resources and attention from other issues that should have priority at local institutions, Mr. Gregor said.

'When the president of the local PTA comes in to a branch manager and says 'Can I have $20 for a raffle ticket,' the answer is, of course, 'Yes, Grace. I'd love to,' rather than having to get corporate approval," he explained.

Building the local flavor of the bank and enhancing contact with the community is the most important factor for community banks, he said.

"[Home banking] shouldn't have the same degree of priority if you want to differentiate yourself from a Bank of Boston;' he said.

That's why $90 million-asset Adams National Bank in Washington, D.C., has taken the slow road toward home banking. It will be offering touch-tone service within six months and adding a personal computer connection capability for commercial accounts. But the services aren't of vital importance, said Alexander Beltran, vice president of operations.

Not having these services hasn't hurt the bank one bit, Mr. Beltran said. He said it is one more service the bank can easily add without great expense by using an outside provider.

He does not worry about the bank losing treasured personal contact with customers because of the services.

"I think the face-to-face contact is something that even the customers themselves want," he said.

Many of Adams' customers work near the bank' s main office and like to drop in, Mr. Beltran said. Additional services can only enhance the relationship, he said.

Whether a community bank needs a good home banking system really depends on the niche the bank intends to develop, said Otto Trostel, vice president of marketing for Penn Security Bank and Trust Co., a $350 million-asset bank based in Scranton, Pa.

Penn Security has been ahead of its peers in home banking precisely because it targets the electronic market, he said.

In 1983, the bank introduced a system to allow customers with personal computers and any communications software program to directly access their own account information.

Today, about 1,000 customers regularly dial up the system. The bank continues to look for ways to grow the system to meet the needs of its local and national customers who can be vocal. Aside from numerous requests for snazzy graphics, a few have recently suggested that Email be built into the system so bank officers can be contacted electronically, Mr. Tinstel said.

Though the bank has licensed its system to two other banks, Mr. Trostel doesn't think it would be an appropriate addition to banks focusing on other business segments.

Consultants and community bankers seem to agree that the next five to 10 years could see home banking taken more seriously at smaller institutions. They say that when customers embrace newly developed technologies, community banks might have to become more interested in the more sophisticated home banking systems they now ignore.

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