The phenomenon of the Third On-line System being implemented at enormous cost by all Japan’s major banks, first came to general notice a couple of years back when NCR Corp’s biggest single mainframe customer, Sumitomo Bank, preannounced NCR’s then forthcoming fault-tolerant 9800XL multiprocessor mainframe by saying that it was spending $42m with NCR for 9800s to be the basis of its Third On-line System (CI No 306). The Third On-Line System is due to be introduced this year and next, writes our Tokyo correspondent Anita Byrnes: it follows the Second On-line System which was introduced in 1975 and automated loan accounting and foreign exchange. The Third is a total banking and financial automation system combining external systems such as home banking and links with other banks. As part of the Third On-line System, a cash management system jointly operated by 13 leading banks came into ser-vice on April 1: it allows a customer who uses a number of banks to retrieve balances and pay money into accounts held at any of them from one bank. The NCR user, Sumitomo Bank, is furthest down the track in implementing its Third On-line System, and has begun testing a special form banking terminal developed in conjunction with Matsushita Electric, NEC and Casio, which is aimed at small and medium-sized businesses and puts them on-line to the bank; the specialist terminals cost about $2,500 apiece, much cheaper than earlier banking terminals, and is also more secure; the new service to businesses will be called Pastel. The new terminal has a removable cartridge with the responsible person’s number encoded in it; it can then be used by other authorised people. IBM Japan is still the market leader with the larger banks, and to consolidate its position, it has established a joint venture with Nippon Telegraph & Telephone Corp to develop electronic banking software; it has also established a joint company with Fuji Bank and Mitsubishi Bank intended to expand sales outlets of IBM machines, and to offer software developed by commercial banks. IBM’s survey of the Third On-line system market showed that the major banks have spent some $450m to $500m on implementing systems over the five years to March 1988, 70% of it on hardware.
