passing passwords while connecting to an Oracle DB

Our application stores clear text passwords and username in the registry to pass it to an application (which does the DB-connection under the hood).

A customer complains about that fact and argues that a competitor would do that (from his point of view the right way).

He gave us an example of the competitors' connection string:

Provider=OraOLEDB.Oracle.1;User ID=%s;Password=%s;Data Source=A1234.WORLD;

First off: OLEDB is a different thing than e.g. the .NET dataprovider

But it has to store the username and passwordinformation anyway in some place, doesn't it?

What would be a solution?