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GREENSPAN HAS ADVICE: GO HIGH-TECH

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Even small banks must embrace high technology or they will wither, Federal Reserve Chairman Alan Green- span told a bankers' convention Saturday.

"Because the hot hand of competition is always putting pressure on, we in our darker moments wish it would go away. . . . But we are wrong," Greenspan said. He said competition ultimately will drive bank stock prices higher - a goal of the bank executives gathered here.Greenspan's prepared remarks did not address another topic of great concern to the bankers - interest rates, and the Fed's role in manipulating short-term rates to fight inflation.

He spoke as an American Bankers Association convention opened with topics of discussion including online banking, computerized loan risk analysis and technology.

At issue for the bankers is their survival as bank regulations are relaxed. Megabanks with huge sales forces are creating new financial products and gobbling up competitors, and nonbank institutions from GE Capital to credit unions are trying to steal customers away.

What former Citicorp chairman Walter Wriston 20 years ago called banks' most powerful possession - detailed financial information - is now available over computer lines to competitors and customers.

Soon, "the valuation of banks will no longer be based on geographic reach, how efficiently they process payments or how many deposits they hold," KPMG Peat Marwick consultant Michael Turillo said in a paper prepared for the bankers.

"In the future, valuation will be based on the information the banks possess and how they are using it to serve customers."