Twelve superregional banks and five systems vendors have formed a research group to study how networks of personal computers can best be used in retail banking.

In these networks, each size computer does the work it is best suited for.

The participants include Huntington Bancshares Inc., Wachovia Corp., Chemical Banking Corp, Keycorp, Comerica Inc., First Tennessee National Corp., Barnett Banks Inc., Barclays Bank PLC, Midlantic. Corp., First Security Corp., U.S. Bankcorp, and Republic New York Corp. Many of them have already embarked on projects to build client-server systems.

Exploding a Myth

Laura Stuart, a consultant, will issue a study on the state of the industry based on interviews with members. And three meetings of members will be held between November and April

In addition to discussing where each bank is headed with client-server computing, the group also wants to debunk the idea that PCs can take over all the tasks of mainframes.

"Client-server computing is being pushed too hard," says Rick Sellers, president of Huntington Service Co., the automation subsidiary of Huntington Bancshares.

Though many bankers believe it is important to distribute some processing power, they say that networks of personal computers cannot process the high volumes or provide the security necessary in the production-intensive environment of retail banking.

The bankers say they need to evaluate carefully where client server technology can best be used.

Wachovia has five projects under way to move software to networks of personal computers and off the mainframe. However, "these are not full industrial strength," said Cecil Smith, senior vice president and group executive of Wachovia. Mr. Smith said use of the technology is limited by inadequate network management, among other things.

According to the 1993 American Banker/Ernst & Young survey of technology in banking, bankers are adopting client-server technology, albeit very slowly.

Four percent of on-line production systems were processed on networks, while 89% of these systems were run on mainframe or midrange computers. In three years, 12% of production systems will run on networks of PCs, the survey found.

Ms. Stuart said that the banks are in a dilemma, and that they may find themselves at a disadvantage with insurance companies and other providers.

She said, "They need to find a place in between two extremes" - those who advocate the central place of mainframes and those who would completely decentralize processing, relying entirely on personal computers. The participating vendors - International Business Machines Corp., Systematics Financial Services Inc., Unisys Corp., Digital Equipment Corp., and Broadway & Seymour - are sponsoring the meetings, with the banks contributing a small amount of money.

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