A licensing agreement that Citibank has signed with a Pennsylvania software company provides an intriguing glimpse into a potentially radical breakthrough in bank computing.

The move puts the Citigroup subsidiary well ahead of its peers on the road to a systems architecture that would replace the large-scale, mainframe-based systems that banks have depended on for decades.

A more flexible, efficient, distributed type of computing infrastructure, sometimes referred to as client/server, has been much discussed in recent years-and deployed, in many instances. Citibank, in fact, pioneered an earlier generation of distributed processing in the minicomputer era of the 1970s.

But most institutions have stopped short of scrapping old, reliable mainframes for core, or mission-critical, activities. Citibank may be changing that with Sanchez Computer Associates' Profile/Anyware system.

Citibank bought its first Profile/Anyware license in 1997 for the five- branch Canadian operation that it recently sold to Canada Trust. A second license was taken by a direct banking unit, not yet formally launched, in February.

In its latest deal with the Malvern, Pa., vendor, announced last week, Citibank's four regional consumer banking operations around the globe gained the right to "independently acquire" the software as their core retail banking system.

James R. Stojack, executive vice president of global consumer operations and technology, said in a prepared statement that Profile/Anyware is part of an "ongoing effort to standardize operations and processes across (the bank's) various consumer businesses."

Bank officials did not comment further and did not return calls. Sanchez said it was not at liberty to discuss its client's plans.

Though the United States is covered by the license, analysts questioned whether Citibank's transaction-heavy home market would get the software soon.

At banks much smaller than Citibank, recent distributed computing installations "have not had the reliability and scalability of mainframe- based systems," said Rick Sellers, a partner in Arthur Andersen's financial services practice in Chicago.

Robert A. Hunt, senior research analyst at Tower Group in Needham, Mass., said mainframes, despite their obsolescence, are "still where everyone is," and he doubted Citibank is replacing its U.S. mainframes yet. He noted that in other countries, where Citibank serves fewer customers, the Sanchez system would mainly replace nonmainframe systems.

He speculated that Citibank may use its experience of deploying Profile/Anyware in the forthcoming direct bank as "a learning process" leading to a longer-term changeover to real-time distributed processing in its U.S. operations.

Such a move would be "unprecedented, but not inconceivable," said Laura Starita, research analyst at GartnerGroup Financial Services in Stamford, Conn.

If Citibank gradually moves the software from the smaller operations to the U.S. consumer bank, it would be doing what Sanchez officials envisioned in their marketing plan.

Sanchez targeted the branchless banking ventures of large banks, knowing that "legacy systems couldn't respond to the time-to-market demands and channel-integration requirements" of a direct bank, said chief executive officer Frank R. Sanchez.

With its foot in the direct banking door, Sanchez hoped to extend Profile/Anyware in mission-critical directions.

This is the scenario being played out at ING Group of the Netherlands, which initially licensed Profile/Anyware for a direct bank in Canada. That led to a global licensing agreement, and ING has so far replaced legacy software in Hungary and opened a direct bank in Spain.

"We're in the infrastructure business," Mr. Sanchez said. "Infrastructure changes only when there is a compelling change in the environment. And e-commerce has created that."

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