The most important factor to consider is acceleration. Today's desktop PCs, for example, have more power than the mainframes we ran entire banks on 20 years ago. Not only is the pace of change increasing, but so is the complexity of the technology.

If you look at the progress to date, it's clear that bankers are making "incipient" use of multimedia technology particularly as it relates to imaging and interactive video both at the ATM level and in conferencing.

These initiatives, though, tend to be segmented efforts undertaken only by the really big players.

So how quickly can these capabilities begin extending themselves to the rest of the industry? Two factors are critical at this stage: expertise and economies of scale.

I anticipate that community banks and other small institutions which can't afford the costs of proprietary development will have to create alliances with vendors and consulting firms.

It's also a good idea for smaller institutions to designate a staff member to become knowledgeable in cutting edge technology issues.

When it comes to assessing the future of multimedia in banking there are three questions to consider: Is there a demand? Are the hardware and telecommunications capabilities affordable? And will the application software follow?

My sense is that the demand is clearly there. People have had such a multimedia-rich life over the past decade that I think they absolutely want to use multimedia professionally.

The hardware is extraordinarily affordable too. A desktop PC at a $1500 price point can now deploy multimedia.

In addition, telecommunications companies can broadly deliver and connect just about anyone to anything.

As for software applications, today's headlines are dominated by stories about billion-dollar companies getting into this market. These firms are sinking a lot of research and development dollars into multimedia.

At this stage, what's a banker to do? I don't think there is a single answer.

Pilot projects will have to be installed to show bankers how they might increase revenues or cut expenses.

Bankers first have to consider the fact that their products and services are going to be delivered through a variety of alternative delivery channels.

These include home banking, remote banking, and variations on the traditional branch. In each delivery channel there is going to be an increasing reliance on self-service.

This is important in terms of multimedia because the general population is already very comfortable dealing in various media forms. As bankers consider new channels of distribution, audio, video and image will be critical -- particularly video.

When making a decision about multimedia as part of their delivery channel, bankers need to carefully consider the technology's benefit and its maturity.

But even if a bank decides not to deploy multimedia right away, that institution should not box itself off from the future.

They should not deploy products, services, architectures, or other capabilities that preclude them from being flexible and moving to alternative channels later on.

ROBERT E. LUND Chief operating officer Newtrend Orlando

TODD RULON-MILLER Chief Executive Officer Software Alliance Corp. Berkeley, Calif.

WILLIAM E. STORTS Partner, retail financial services Andersen Consulting Columbus, Ohio

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