At first National Bank of Chicago, bankers have the news at their fingertips.
With a simple click of a mouse or a tap of a keyboard, corporate bankers, personnel in investor relations and cash management, and senior managers can retrieve full text news stories as they are filed from around the globe.
Having real-time news capabilities gives First Chicago bankers a competitive edge. By not having to wait to see the news on television or read it in a newspaper, they can sometimes jump on new developments long before their competitors. That allows them to advise and service their clients more efficiently in all aspects of banking and finance.
"With the news at our desks we can act on it today, when it happens, instead of 24 hours after the fact," said Scott Bates, 45, a First Chicago corporate banker. "If we started to act 24 hours behind everyone else, we would be dead."
For example, a story recently came over the wire about a company that was buying in some subordinated debt and refinancing its senior debt. A First Chicago banker who frequently called on the company turned out to be the first to call its chief financial officer with specific ideas on how to accomplish its objective.
"It reinforced in the CFO's mind that we are a bank that knows what is going on and one he should be doing business with," said Mr. Bates.
First Chicago uses NewsEdge, a product sold by Desktop Data Inc., Waltham, Mass. The program is a live newsprocessing service that provides real time updates and full text retrieval at a standard personal computer.
Before the $31 billion-asset bank went on-line with NewsEdge, it relied on a typical mix of newspapers, magazines, and wire services for information.
"In most cases, we were working with dated information," said Mr. Bates. "NewsEdge gives us access to the information as soon as it appears. If we don't know if a client is in the news or how its securities are doing, we are not doing our job."
Users receive stories as they are filed from more than 140 licensed sources - including newspapers, industry reports, and wire services. The system is also equipped with a feed of the Standard and Poor's Comstock equity quotes - tape-delayed by 15 minutes.
"NewsEdge allows me to see a headline, click on it with my mouse, and pull up the full text in a matter of seconds," said Richard Spencer, a First Chicago vice president. "It is a tool that allows us to see the client on a wider horizon, instead of focusing on quarterly reports or daily newspapers."
The system runs on a Compaq OS/2 server installed at First Chicago's downtown headquarters.
When the information is retrieved, it is sent to a series of Novell servers, which allow individuals at the bank's locations throughout the world to access the news from their PCs.
"NewsEdge makes us better financial advisors because we are able to have the information as soon as it is available," said Mr. Bates.
First Chicago began subscribing to NewsEdge more than a year ago and currently has 100 users. According to Debra Dresner, a vice president at the bank, it plans to double the number of users by 1994. Over the next few years, she sees the potential for more than 300.
The bank also subscribes to a number of other electronic news services from a number of other vendors, including Knight-Ridder, Bloomberg Business News, Quotron, One Source, and Telerate.
Mr. Bates said that while the systems do overlap in delivering the news, each has a specific strength that makes it useful.
For example, NewsEdge does a good job tracking specific information through user designed profiles. According to Cliff Pollen, a vice president at Desktop Data, the user is able to set up 16 different "profiles" based on key words, company names, or phrases, which the system automatically searches for as the news is filed.
When a story is found that meets the profile, the machine beeps and a banner appears in the lower right hand corner of the screen. The alert penetrates any screen regardless of what program is running. The banner remains on the screen until the story is retrieved or a new one is filed.
When the system finds a new story that fits the profile, it automatically stores the previous article in a "profile database" and alerts the user again.
The profile data base allows users to access only the stories they want without scrolling and looking through all of the day's stories.
According to Mr. Bates, NewsEdge also acts as a live library that allows the user to search the previous two months' worth of articles from all of the sources.
Mr. Bates said that at any given time the user has access to the full text of approximately one million articles.
"I think NewsEdge is a significant step in information services," said Reva Basch, president of Aubergine Information Services, Berkeley, Calif. "We are finally beginning to take full advantage of technology offered by the PC revolution."
Mr. Bates said that although NewsEdge and wire services offer many alternatives to newspapers and broadcasts, the conventional sources will continue to play an active role in a banker's day-to-day business.
"Although a lot of the stories are available on the screen, some are not. More importantly, the screen can not be read during the commute," he said.
Nevertheless, said Ms. Dresner, the bank is exploring ways to cut its paper-based subscriptions 20% by 1994. "In some situations it is cheaper to purchase products on-line than the actual paper subscriptions," she said.
First Chicago is also exploring the option of using NewsEdge as a data highway to distribute its internal publications.
"We have over 50 publications that are distributed internally and externally in the corporate banking department alone," said Ms. Dresner. "We think we can use the work-station as a front-end vehicle in the distribution of both our internal and external news. I would like to have the bank distributing its internal newsletters directly on-line within a year."
Ms. Dresner would not disclose how much First National pays to subscribe to NewsEdge, but she did say the cost is very reasonable compared to the other wire services.
According to Desktop Data's Mr. Pollen, the cost of the system depends on the amount of users and sources. He said that as the number of users goes up, the cost per user goes down. Subscriptions to NewsEdge range from $55,000 to $495,000.