Wells Fargo & Co. has long been known as a thrifty bank that deploys technology wisely.

And the changes under way at the San Francisco-based bank's trading desk may advance that reputation.

Wells Fargo is in the midst of installing systems to support its equity and fixed-income trading operation that are expected to save millions of dollars over the next five years. During the next year, the trading activities of First Interstate Bancorp, which Wells acquired this spring, will be moved onto the system.

Savings from combining the trading activities will contribute to the $800 million of expense reductions expected from the merger.

"They are basically tripling their trade volume and only adding 20% more staff," said Cliff Janson, vice president of trading systems.

Wells Fargo is the latest bank to move to networks of personal computers to handle trading for trust clients. Commercial banks have generally trailed Wall Street investment firms in deploying client-server technology.

Mr. Janson said Wells is the first large commercial bank to install Landmark software, from Longview Corp., Boston. The Windows NT-based product runs on an NEC Technologies server. Desktop computers of traders and portfolio managers use either the Windows 3.1 or Windows '95 operating system.

"There is an attitude inside of Wells where we like to be on the leading edge of technology," said Mr. Janson. "There is an attitude of promotion for brand-new things, if it's perceived that the technology makes sense and will be a dominant technology within five years, which is clearly the case for Windows NT."

Technology consultants agree.

"Within the next five years we are going to see a major shift from Unix to NT," said Lawrence Tabb of the Tower Group, Wellesley, Mass.

Wells considered installing a Unix-based system. Unix systems are used in other areas of the bank, including branch automation, and are popular among major Wall Street firms. But software for that operating system was significantly more costly.

"The price of the (structured query language) relational data base was four times less for Microsoft than on the Unix platform," said Mr. Janson.

The five vendor trading packages on Wells' final list were all Windows- based. They had something else in common: None had yet been installed in a large commercial bank.

"That's the one way in which we did take a risk," said Mr. Janson.

So far, just 20 brokers are linked to the Landmark system. In coming months, about 200 traders and portfolio managers will be ordering and executing trades using the application. But Wells says efficiency improvements are already exceeding expectations. The time it takes to process a trade has been cut by a factor of 10.

"On the equities desk, in the original business case, I think we said there would be something like a 75% labor savings," said Mr. Janson. "But they are even getting more than that."

Currently, the equities desk executes about 500 trades daily, with an average per trade of $300,000. The desk has six traders, and Mr. Janson said it will be able to absorb First Interstate's volume with only one additional stock trader. (That does not include equities portfolio managers at Wells or the former First Interstate.)

"Orders are entered on the screen using a mouse by the portfolio manager, and they are delivered to the trading desk on the screen," said Mr. Janson. "There is no paper involved whatsoever."

Previously, Wells had used a partially automated system on which orders placed by portfolio managers were printed out at the equities desk. Once the trade was made, the information had to be rekeyed into a "dumb" terminal linked to a mainframe computer.

"All of that by today's standards is very clumsy and inefficient," said Mr. Janson.

Efficiency improvements on the fixed-income desk are expected to be significant but not quite as dramatic. The bank's plan anticipated a 40% saving of labor costs, but Mr. Janson said, "It's really hard to estimate that."

Bond traders won't be using the system until later this year or early 1997. Mr. Janson said the timetable was extended because the desk plans to absorb First Interstate's trading operations at the same time.

"The desks and the physical people are combined, but they have to use multiple computer systems for the time being," he said.

Another key issue for Wells is training employees to use the new system. Indeed, Mr. Janson said, the rollout schedule hinges more on training than technology.

"The portfolio managers are spread throughout the state of California," he said. "We actually have to fly out to the offices to train them and do installs in their PCs. It's going to take some time.

"There is a lot of work involved because of the technology change."

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