In an unusual display of technical preparedness, UMB Bank of Kansas City, Mo., involved 30 retail and commercial customers in a test this week meant to simulate banking activity just before and after the first weekend of 2000.

The exercise served as a public pronouncement of readiness for the millennium and a way to say the bank is on course to a new phase of acquisitions.

"We are looking at year-2000 somewhat strategically," said Alexander Kemper, chairman, president, and chief executive officer of the bank and president of its $7.3 billion holding company, UMB Financial.

Fallout among $500 million- to $1.5 billion-asset banks unready for the date change will present "an opportunity for us to strategically acquire banks and their customers in the first part of 1999," he said.

Lawyers and dealmakers have predicted that the release this week and next of 10-Q reports requiring the most detailed information yet about year-2000 readiness will point to vulnerabilities that could force some banks to sell out.

"We were motivated as much by fear as by our strategy," Mr. Kemper said. "Now that we've been successful with our systems, we can put our strategic hat on."

UMB recently told the Securities and Exchange Commission that it had finished testing 99% of critical deposit systems developed in-house and 80% of critical systems provided by vendors, according to Dennis Rilinger, executive vice president and general counsel.

The testing is expected to end in March. The entire year-2000 project is expected to cost $25 million.

UMB started early so it could be the first bank to show customers and the public that it was ready for 2000, Mr. Kemper said.

"If other companies are not in a position to publicly test their systems, then they are dangerously behind the curve," he said.

The tests conducted Monday and Tuesday were meant to simulate Friday, Dec. 31, 1999, and Tuesday, Jan. 4, 2000.

On Monday, test participants supplied with automated teller machine cards, cash, and checks made deposits into dummy checking accounts set up on UMB's actual system. They were encouraged to withdraw and transfer funds and look up balances at ATMs, over the phone, or with tellers, and to write checks. They could purchase goods at a temporary store in the bank lobby selling UMB paraphernalia.

Participants returned Tuesday to verify that systems had accurately registered the previous day's transactions.

It was as much a public relations event as a test. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, spoke Monday on the importance of year-2000 compliance. The program was open to the public and press and was covered on local television.

"It is reassuring in the minds of customers that we can take care of them," Mr. Kemper said.

UMB wanted to demonstrate its ability to process the transactions most executed by consumers in its 160 branches and 580 ATMs. "Most of our customers are focused on deposit systems, because they need to know they have access to their cash," Mr. Kemper said.

The conversion-the culmination of three years' work-is "a point of differentiation for us," Mr. Kemper said. "We believe we can stand out as a strong provider of safety."

Besides focusing on bank acquisitions, UMB will capitalize on its preparedness in wooing customers from competitors.

"Good customers have come to us, and we believe that will be similar in the future," Mr. Kemper said.

Deborah Shuck, financial controller of A. Zahner Co. of Kansas City, was one of the 15 commercial customers to take part in the test.

"It makes me feel pretty proud to know that my local bank is ready this far in advance," she said. "It makes me feel comfortable with who we bank with."

She carried out five transactions over two days, including writing two checks, withdrawing funds, making a deposit, and buying a shirt from the demo store.

Ms. Shuck said she participated in the test because she "was curious about what UMB was doing."

"I wanted to make sure our money would be safe and accessible in January 2000."

Regan Wong, an analyst at Tower Group of Newton, Mass., said that the test had real but limited valued. Though it reassured the public "that the bank is on top of its systems," he said, it was a controlled experiment-and the actions of the control group could be anticipated.

"I don't think mission-critical systems will be the issue in year 2000," Mr. Wong said. "I suspect it will be the not-so-obvious subsystems that may take a hit."

UMB had hired consultants from Cap Gemini Group and directed 20 full- time and 200 part-time employees to work on the year-2000 project.

"We were actively recruiting for some time from local universities and major placement firms to find programmers who could write code," said Noel Strong, assistant vice president and group manager of UMB's team.

Bank officials visited commercial customers identified as at high risk of not being year-2000 compliant, Mr. Kemper said. Over the past 18 months "everyone was visited and reviewed."

"We took personal tours to see their systems, not just to protect ourselves but to help them understand year-2000," he said. "Less than half a dozen have significant issues outstanding."

Bill Burnham, a senior research analyst at Credit Suisse First Boston, expressed reservations about the hoopla around this week's tests. He recommends a subdued approach to announcing the completion of year-2000 conversions.

"Some banks are saying 'We're complete' but they are not going to stop until they've tested and re-tested," said Mr. Burnham, who is based in San Francisco. Changes can occur, he said - particularly on the vendor side.

"Keeping a low profile until you're certain is probably best," Mr. Burnham said. "It's not over till it's over."

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