LEAD: IN the battle among banks for retail customers, the victors are likely to be those that use high technology best. So banks are now spending more than $10 billion a year on electronic technology to attract more customers, serve them more efficiently and keep staffs free to sell more profitable products.
IN the battle among banks for retail customers, the victors are likely to be those that use high technology best. So banks are now spending more than $10 billion a year on electronic technology to attract more customers, serve them more efficiently and keep staffs free to sell more profitable products.
The contest is evident everywhere. Customers of the People's Bank of Bridgeport, Conn., can call from auto showrooms to arrange a loan in as little as 15 minutes. Chase Manhattan promotes its credit cards by listing 34 features, including a free worldwide message network and a legal services program. Teller machines of the National Bank of Commerce in Memphis dispense coupons redeemable for Campbell soups. When the Dollar Dry Dock Savings Bank of New York was raiding customers from a nearby Chemical Bank branch, Dollar Dry Dock teller machines were programmed to flash a reminder about free gifts every time a Chemical customer slipped in a card.
These skirmishes reflect the struggle to wring profits from retail banking and the extent to which innovative marketing will depend on technology. Automated teller machines, telephones and plastic cards are the weapons. Long gone are the days when banks could be content to pump out generic Visas and Mastercards. Now they are trying to become brand names in their own right.
The cashless society is still a long way off, but banks are hastening the day when going cash-less might be easier than going card-less. Twenty years ago, when Chemical Bank installed the nation's first automated teller machine, it was a primitive contraption that did nothing but dispense cash in $15 and $30 lots. Back then, BankAmericard, the forerunner of Visa, was a local program of the California-based Bank of America. And when a customer called a bank, another live person came on the line. Following Customers Everywhere
Now, a web of computers, telephones and plastic cards lets banks serve their customers wherever they travel and work. ''The credit cards allowed banks to follow their customers across state lines and provide banking services nationally, despite the antiquated branching laws,'' said D. Dale Browning, the president of Colorado National Bank. By giving customers instant loans at any store that accepts credit cards, banks created an industry that is now one of the most profitable parts of their business.
Teller machines now dispense cash down to the penny, accept deposits, transfer money and, in the newest models, help customers apply for mortgages and loans. Banking by phone handles everything from auto loan applications to bill-paying, all with beeps, tones and recordings.
Teller machines and telephone banking services have not generated the same profits as credit cards. But they are crucial for consumer banking, especially in large cities where competition is most intense. Both let banks cut costs and extend their reach far beyond their home states.
Automation and electronics can help limit the growth of costly bank branches, 40 percent of them money-losers. Branches will not disappear. But bankers want teller machines and telephone banking to free the branch staff for selling more profitable products like mutual funds.
Gradually, bank customers are learning to love teller machines, if not as much as bankers would like. Banks have fueled the romance by linking teller machines nationally. ''Customers for some time have come to assume that merchants - with some exceptions like grocery stores - will accept credit cards,'' said J. Paul Bouchelle, executive vice president at the First National Bank of Albuquerque, N.M. ''Now we are reaching a point with automated teller machines that when they see one, they are inclined to expect that they have a card that will let them get cash.''