Wells Fargo & Co. said it will pay Oracle Corp. as much as $7 million extra over the next two years to upgrade and expand its relational data base systems.
The goal is to create a standard data base for all Wells and First Interstate branches. The two banks merged in April.
Wells already uses products from Oracle, which is based in Redwood Shores, Calif., in its network branch systems, call centers, and data warehouses. The bank will use the additional systems to bring uniformity to its newly expanded operations.
"We're not evaluating First Interstate's branch technology - we've already done that," said Barry X. Lynn, executive vice president of Wells' customer information group. "We're going to put our branch technology in their branches.
"We're converting on a state-by-state basis. We're converting California in July and August, and we'll be developing other states' schedules in the near future."
Until the merger, Wells operated solely in California. First Interstate did business in 13 states.
The new contract with Oracle includes as much as $4 million in licensing fees for two years plus $2 million to $3 million in service fees, Mr. Lynn said.
Ray Lane, president of Oracle Worldwide Operations, said the technology licensed to Wells is an alternative to mainframe computer systems.
He described Oracle's system as "open" - meaning it is compatible with any type of computer - and "relational" - meaning that "granular data can be stored in rows and columns and related to anything else, rather than stored in a hierarchical manner.
"The banking industry has been sitting back evaluating open relational technology," Mr. Lane said. "They're so committed to legacy proprietary platforms like the mainframe that this is quite a challenge for them."
Using Oracle's systems, Mr. Lane said, Wells will be able to "go into specific areas of their business to study the behavior of their customers and segment out pieces of data." The information could help the bank with marketing and new product offerings, he said.
Wells Fargo's customers also will notice changes as Oracle's products bring more sophisticated graphics and video at automated teller machines, Mr. Lane said.
"I think it will show up in kiosks and branches," Mr. Lane said.
