Technology never seems to deal bankers an easy hand. In their perplexity, they can easily lose sight of the fact that some of the biggest companies that supply technology face many of the same challenges-in spades.
Oracle Corp., for one, might be blamed along with other high-tech leaders for foisting unneeded costs and confusion on the financial industry. In his speech Wednesday to the Retail Delivery '98 conference in Las Vegas, Oracle chairman Larry Ellison joked that his industry became the most profitable in the world "by selling products people don't want to buy, and charging top dollar for them."
But the software executive noted that his company and others - archrival Microsoft Corp. among them-have been forced to reinvent themselves. The current cause for radical change he terms "Internet computing," which is displacing the previous generation of personal computers linked to client/server networks, which had earlier overtaken mainframe-based systems.
Mr. Ellison took off from that point in an interview with American Banker executive editor Jeffrey Kutler, excerpted here.
ELLISON: The Internet model combines the best of both of the two older computing models. It gives you the low-cost hardware, ease of programming, and high-quality user interface that we have come to expect from PC computing. On top of that, it centralizes complexity and consolidates information on a small number of large servers, which dramatically lowers labor costs and improves reliability. Better information at lower cost is what you get with the Internet.
Bankers have been hearing, or wanting to hear, this kind of message about data bases for years. What happened that makes it real today?
ELLISON: We have actually been talking about this for years, going back to the network computer. What happened this year is that the Internet has become the center of gravity for the computing industry. This year, or maybe next, will be the year the Internet becomes more important than the PC, just as in about 1990 the PC became more important than the mainframe. People will open their minds to alternative ways of doing things.
This is not just something Oracle is saying. That's the way the Internet works. People are more receptive to what we are doing because of the Internet's popularity, and we are doing a better job of marketing and communicating. What we used to call network computing is now Internet computing. But the message is the same.
How do you view your banking/ financial market, and is there a cultural divide between Oracle and the institutions it is selling to?
ELLISON: I think the divide has narrowed. There is a huge difference between our back office and a bank's, no doubt about it. But if you look at us collecting information about our customers, outbound marketing campaigns, trying to identify the most profitable customers, who to sell new things to-it's exactly analogous. When I sit down with the chairman of a bank to discuss these issues, we understand each other very, very well.
Banks are getting bigger, and some bankers see large scale and globalization as imperatives. That must be good for your data base technology.
ELLISON: Yes, in the sense that we are very good at providing information systems that are global. Systems are sometimes fragmented for silly technical reasons-maybe separate systems are built for Greece because what we originally wrote doesn't handle the Greek alphabet. Our systems are multilingual, handle different character sets, and are truly global. The cost of ownership is lower, and the quality of information is spectacular because it is not fragmented.
Are you talking about fulfilling the dream of mass customization?
ELLISON: Yes. With all the consumer information in one place you can do that. You can tailor an investment program or insurance portfolio for every single customer.