GE Sheds Light on Financial Services

General Electric is increasing high-tech spending by 12 percent, to $3 billion, this year-three times the average rise for IT spending.

General Electric is increasing high-tech spending by 12 percent, to $3 billion, this year—three times the average rise for IT spending. The most interesting thing about GEs e-business strategy is the thoroughness of the corporate transformation, for it includes a top-to-bottom remake of GEs earlier dot-com strategy that is leaving no corner of the company untouched.

As GEs CIO told Forbes magazine, "Two years ago, we would never be doing this. But things have changed here." What, exactly, has changed? And what ought the rest of us take from GEs example?

The primary change over the last two years is in the overall value proposition offered by the Internet.

GE is taking advantage of the new possibilities created by improvements in technology that are emerging just as businesses are beginning to understand the values offered by universal connectivity and starting to reorganize their business processes so that value can reliably be extracted.

These possibilities include the facts that wider availability of high-speed access is making the Internet more comfortable to use, and the growth of wireless technology makes it portable and global. More importantly, the arrival of XML allows standardization of communication, whether internally among formerly distinct business divisions and territories, through a closed network between a company and its customers, or as a public marketing channel.

The e-commerce circuit is not complete, of course, without the ability to move payment information as quickly as any other message. In the financial services sector, this is taking shape under the leadership of the Banking Industry Technology Secretariat in the form of Interactive Financial Exchange, a standard for financial messaging that enables e-commerce using IFX/XML.

Financial institutions must build their future by providing a seamless digital infrastructure that adds value through speed, reliability and cost efficiency. Banks that are on the same digital page as the GEs of the world will remain viable. Others will, like clumsy toddlers, stumble—but will probably never rise.