UJB Financial Corp. has begun installing retail banking software that it believes will help improve cross-selling by branch personnel.

At two United Jersey Bank test branches, the software from NSS Corp., Bedford, N.H., was an integral part of an automation project that increased sales to existing customers by 15%.

Now the Princeton, N.J.-based banking company is including the software in a comprehensive $32 million upgrade of the systems that tellers and platform personnel use at its 276 branches.

The upgrade illustrates the decisions facing many banks as the previous generation of branch automation systems outlives its usefulness.

Antiquated Batch System

"We had a 10-year-old batch sales management tracking system that we knew we had to replace," said Alan Posencheg, president and chief executive of UJB Financial Service Corp. Data processed in batches, as opposed to on-line, lack the immediacy and flexibility that bank marketers say is essential to sales management.

"The cross-sell culture is something that we feel needs to be supported and driven with a system that prompts the customer service representative to [sell] the right products."

UJB is not alone in its desire to improve the productivity of branch workers. Bankers have known for years that building upon existing account relationships is an ideal way to boost retail profits.

But only recently has the industry as a whole looked to automated systems to help achieve this goal.

Mentis Corp., a technology research firm based in Eden, Md., has found that of all retail branch operations, branch systems are most in need of improvement. Mentis data show that spending on branch automation will be more than twice that for any other banking technology over the next year.

The Mentis findings were corroborated in an American Bankers Association survey showing that 52% of banks with $5 billion or more in assets plan to add new teller-assist products before 1996, and 47% plan to improve the networks of personal computers used by platform officers.

Experts thus expect to see most banks with at least $1 billion in assets undertaking significant branch automation projects in the next few years.

Most of these upgrades are likely to include the type of cross-sell software being installed at UJB.

Mr. Posencheg said one of the benefits of a cross-selling system is that it enables the bank to introduce complex sales-incentive programs for employees.

For example, if while selling a basic product like a checking account a teller persuades a customer to switch a certificate of deposit at another bank over to UJB, the teller can be credited for the sale of the CD, even if it is weeks before the customer actually opens the CD.

UJB has installed the software at about a third of its branches. It expects the systemwide upgrade to be completed by mid-1994.

The upgrade will involve nearly 3,000 personal computers, including 1,600 teller stations and 1,100 customer service terminals.

The branch automation system, which is based on software from International Business Machines Corp., is expected to save UJB $10 million a year in operating costs.

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