Out with the Old, in with the New?
Calsin, John B., Jr., Independent Banker
As the use of personal computers continues to rapidly growamong community banks, the question becomes: How quickly do you throw away the mainframe? While the PC can readily position a bank's technology for the future, you may want to think twice before hauling the old mainframe to the trash bin.
The fact is that the mainframe computer still has a place in the community bank, even in a bank where PCs are popping up on everyone's desk.
Computer networking has become the technological rage in business these days. And the same is true for small banks, which are implementing PCs at a rapid pace. A survey by American Banker and the Tower Group earlier this year found that community banks have increased their use of PCs 13 percent in the last year. The banking industry as a whole increased its use of PCs only 9 percent.
Banks are implementing client/serve technology, where clusters of PCs are tied together to form networks. The networks allow bankers to share information. The PC networks give front-line personnel access to complete, up-to-date marketing information when dealing with customers.
As banking consultant Thomas A. Donofrio says, "Client/server technology allows you to take all that information from your bureau or your backroom and put it at everyone's fingertips."
Maintaining a Mainframe Role
And while PC networking offers pronounced advantages, there's still a place for mainframe computers in small banks. The mainframe can still perform functions--albeit differently than in the past--that PCs cannot match.
"It's the old curmudgeon idea that this is old, therefore this is no good," says Thomas Egan, executive director for the Study of Connectivity and Databases at West Chester University, West Chester, Pennsylvania. "The newer technologies offer a lot of advantages. But they are not a panacea."
Egan cites several reasons why bankers who are moving to a network environment may not want to discard their mainframe computers yet. One reason is the application software used on the mainframe. If the software is satisfactory and accomplishes its purposes, stay with it. "The hardware is secondary," Egan says.
The capability to move a bank's legacy, enterprise software from the mainframe to a network is still in the development stage. Moving mainframe software to a network environment can be a difficult if not impossible transition.
For the banker who owns a mainframe, but realizes the advantages of a network environment and wants to move in that direction, Egan offers a suggestion: "Do that with caution. In other words, first try to bring the network up and take advantages of it before abandoning the mainframe."
Some banks that are converting to network environments are relying on their mainframes to be the server in their new client/server environment.
That's the case at The First National Bank of West Chester, Pennsylvania, which has been computerized since 1967. Today, the bank is moving to a network environment, but it is still using its mainframe.
"Our mainframe, an IBM 4381, is a giant server," says First National Senior Vice President James D. Gruver. "We have three local area networks (LANs), and we are putting in four more."
First National's LANs are in accounting, trust and administration. The branches are future network targets and currently use the mainframe for customer-based information queries through dumb terminals.
Gruver does not believe the PC-network environment will be adequate to handle the night throughput of transactions for their more than 30,000 customers, as well as the peripherals, fast disk drives and the cassette tape drives. The mainframe will continue to serve as the database.
The Flexibility of Software
For First National's networks, which will become wide area networks (WANs) once the branches come on line, much of the software is not proprietary.
The openness of software in the network environment contrasts that of the mainframe. …