When executives at Bank South of Atlanta recognized a need to improve sales and customer retention at its branches, they simultaneously realized the technology in place was not going to allow them to reach their goals. We were getting requests from various user departments both on the retail and the operational sides to add functionality, said Al Schulman, Bank South's information-services project manager. We couldn't do it because we just didn't have the horsepower. After realizing its teller and platform workstations were obsolete and unable to meet the demands of users, the $6.9 billion-asset bank opted for a complete overhaul of its branch retail-delivery system. The project, which redistributes processing power through new server and PC desktop systems in each of it 145 Georgia branches 49 of which are situated in supermarkets is now at the midway point of its targeted two- year installation schedule. The reconfigured branch system, dubbed Southnet, will replace a network of IBM 4700 teller units installed in 1986 and a PC-based platform system brought in two years later, with high-powered personal computers that can handle tasks more adroitly. One of the strategic directions for Southnet is to provide consumers and small businesses access on their terms at their convenience, wherever and however that might be, said Lee M. Sessions, Bank South's principal operating officer. By improving service at the point of contact, Bank South hopes to strengthen existing customer relationships and expand them where possible. Mr. Sessions said the bank's research shows it holds a 32% share in metropolitan Atlanta, a solid chunk of the market, considering the number of other big-name competitors in the region. With better delivery of product information and other services, he adds, Bank South is aiming for customer dollars held by nonbank competitors such as brokerage houses and insurance companies. Our customer base wants to do more business with us, Mr. Sessions maintained. According to our research, we are the number one financial institution of choice (in Atlanta). So it behooves us to have all this information in one spot. How that information looks to the tellers and platform staff using it is also part of the equation. Our current platform technology is account driven, not product driven, which means the customer has to sit down and tell the customer-service representative that they would like to open an account, Mr. Schulman said. With the new system, the first thing we do is ask the customer about themselves, and that's where we can cross-sell. If a customer walks in looking for a place to invest $5,000, for example, platform staff can recommend a range of options, depending on that customer's specific needs. Richard Crone, senior manager of the center for electronic banking at KPMG Peat Marwick in Los Angeles, says client/server applications such as this one have become an important way for banks to compete for customers with other banks and with nonbanks. Mass customization cannot take place with the inflexible processing structure centered on the mainframe, he said. It can only take place where banks can adaptively interpret information. Mr. Crone suggests that the movement to client/server automation may also help banks reduce processing costs. The cost per MIP (millions of instructions per second) on the mainframe is far greater than the cost per MIP on a PC, Mr. Crone said. So the opportunity exists to not only delegate processing down to the point of presence but also to reduce costs dramatically. By replacing dumb terminals in the branches with PCs, Mr. Crone adds, banks are matching the power many of their customers already have at home with their own machines. The problem with home banking, he said, had been the way it turned a home computer into a dumb terminal, voiding the user's cherished point-and-click habits. By maintaining that functionality, banks will have an opportunity to reopen this market. There are 35 million PCs in the home, Mr. Crone said. And much of that power is underutilized. Mr. Sessions said home banking services were definitely part of Bank South's vision for the future. Down the road, that will be a reality, he said, and Southnet will help us dramatically. In the meantime, the bank will be working to exploit its own PC power. With the new system in place, customer service will be faster and more responsive, regardless of the time of day, bank executives said. During multiple sessions with the mainframe under our current system, 640K is just not enough memory, Mr. Schulman said. At peak times, when you really want to have high-speed throughput, our old system becomes a bottleneck that slows everything down. With power loaded at the front end, a customer-service representative can access customer information easily by clicking on a pull-down menu or an icon rather than laboring through multiple screens. Operators will not know if they are even linked to the mainframe. By creating what will eventually be a unified system, Bank South will also have improved the process of training new employees by integrating a host of disparate systems accumulated over eight years. Data, for example, now looks one way on the PC side and shifts when the user begins a session with the mainframe. With a more powerful, well- integrated system, new products and services can also be introduced faster and more effectively. Driving these advances are application software and integration services from Unisys Corp., the Blue Bell, Pa., information-management company. The $4 million project will include integrating information systems and networking devices from numerous suppliers and linking the restructured branches to the bank's central IBM network. The company's application software, called Financial Business Architecture (FBA) Navigator, will be used to develop new teller and platform applications. The program incorporates a graphical user interface and will support a range of retail functions, including telephone and private banking. Delivering those applications to the front end is another function of the Unisys package, the FBA Finesse 2000. It handles transaction processing and, through icons, assists customer-service representatives with opening new accounts, cash balancing and transfers, and financial calculations, among other functions. When the project is completed by the end of this year, Bank South looks forward to a quick payoff. The income we expect to result from increasing customer retention and cross-sell opportunities will justify the cost of the system within five years, Mr. Schulman predicted. One of the toughest moments in this undertaking, Mr. Schulman added, was deciding on an operating system. Microsoft Windows NT environment received the nod, but only after tremendous debate within the bank, according to Mr. Schulman. By the end of 1995, Bank South will also have established centralized control of the system's security. We're looking at relying on Windows NT security at the server level at every branch and then backed up by the main controller, Mr. Schulman said. With all its bases covered, Bank South appears to be on its way to securing better service for its customers.

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