ATLANTA - NationsBank Corp. chairman and chief executive Hugh McColl Jr. issued a ringing call Monday for banking-industry cooperation to counter the threats of new high-tech competitors.

Heralding a coming "era of electronic commerce," Mr. McColl described such bank cooperation as essential for fending off technology competitors in particular.

"I can envision a partnership of banks with a strong technology partner building its own channel, its own financial-services highway," Mr. McColl said in his keynote speech to the Bank Administration Institute retail delivery systems conference, held here.

As an example of the cooperation he had in mind, Mr. McColl pointed to NationsBank's own recent joint venture with BankAmerica Corp.

In May, Charlotte-based NationsBank and BankAmerica announced the purchase of Meca Software Inc., maker of the Managing Your Money personal finance program. The NationsBank-BankAmerica consortium was joined last week by First Bank System Inc., Fleet Financial Group, and Royal Bank of Canada.

Mr. McColl predicted the venture will "deliver a winning product, shared influence and brand independence" for its partners.

"Alliances like the Meca partnership begin to demonstrate how our industry could build its own (technology) channel," he said.

Mr. McColl's call for industry cooperation might have startled some in the audience, given the NationsBank chief's well-known feistiness towards his banking competitors.

Referring to his U.S. Marine Corps background, he continued: "Whoever thought McColl, the original hand-grenade thrower, would issue a call for cooperation? I would ask the same question myself. In fact, I have."

Mr. McColl hastened to add that banks should continue to compete among themselves. "Cooperation does not mean an end to competition," he said. "That's not a part of my game plan ... But our shareholders do expect us to position our companies for the future in ways that add shareholder value. In that regard, a partnership does make sense."

"Our industry faces unprecedented opportunity in the era of electronic commerce," Mr. McColl declared. "The strong survivors will be those that marry knowledge of their customers with knowledge of technology to pinpoint customer needs and respond with the right product, at the right time, through the right channels."

"Winners in this era may be banks," he added, "but they just as easily could be technology companies."

Mr. McColl warned that technology companies could eventually control a bank's customer relationships by controlling the medium banks use to reach those customers.

Many of Mr. McColl's comments were directed at Microsoft Corp. CEO Bill Gates, who is scheduled to give the major speech to the institute conference Tuesday.

Mr. Gates was quoted in 1994 as linking the future of banks to the fate of the dinosaurs. Microsoft's bid to acquire Intuit Inc., the maker of the popular Quicken financial planning software, was seen as a particularly dire threat to the banking industry since such a venture had the potential to eventually get Microsoft into the banking business. The bid was later aborted.

Mr. McColl did not set Mr. Gates up as an enemy per se, saying he has "a great deal of respect for Mr. Gates - the same respect I give all of my most capable competitors. ... He understands the power of information and the tools to use it profitably.

"Bill Gates is right," Mr. McColl said. "If we don't heed his words and wake up to the choice of whether we use technology to the benefit of our customers, (we will) ultimately be used by the technologists - and pay them for the privilege by handing over our customers."

Mr. McColl's speech received quick and generally favorable reaction from a panel of industry leaders who followed his presentation.

Edmund P. Jensen, president of Visa International, praised the address as a "call to arms" as opposed a "wake-up call," which is how Mr. McColl had characterized Mr. Gates' dinosaur remark.

Turning the dinosaur imagery its head, Mr. Jensen pointed out that "banks also have the capability to be raptors," the prehistoric flying predators popularized in the movie "Jurassic Park."

Saying Visa is an example of the industry cooperation that Mr. McColl asked for, Mr. Jensen added, "we have every capability as an industry of moving ahead. I simply don't buy that the banking industry is going to lose the customer relationship over the next 10 to 15 years."

He urged the estimated 5,000-member audience to "get over the dinosaur thing, get beyond any straw man and think about ways we can win."

Peter Kight, chief executive of Checkfree Corp., Columbus, Ohio, agreed that it may be a disservice to focus on the threat of Microsoft or other potential competitors. "I prefer to see it as an opportunity," he said. Online services "could be the solution to the high cost of brick and mortar."

"The No. 1 place consumers and businesses want to receive this technology from is their bank," Mr. Kight said. That could the beginning of a tremendous opportunity."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.