In a major expansion of its home banking program, Citibank announced it will market a screen-based telephone service in conjunction with two regional phone companies.
The Citicorp subsidiary said Tuesday it will join with Ameritech Corp. next spring in what will probably be the biggest deployment yet of telephones equipped with keyboards and computer screens.
The devices will be used in as many as 200,000 households in the Chicago area, where Citibank has 52 branches.
Citibank also revealed that a similar test with Nynex Corp., which had been under way quietly in upstate New York, has moved into a higher-profile phase, though on a smaller scale than the project with Ameritech.
In the Limelight
Together, the ventures add up to a leap forward for the type of telephone that Citicorp has been experimenting with for the past few years. Citicorp and several other institutions are betting that screen phones will persuade large numbers of customers to do their banking from home.
Until now, Citibank has taken tentative, behind-the-scenes steps into telephone-based banking. By hooking up with two Baby Bells, Citibank is stepping into the home banking limelight.
The equipment in each test will be the latest version of a phone with display screen sold in the United States by Philips Home Services of Burlington, Mass. That company is a unit of the Dutch electronics conglomerate Philips, which manufactured screen phones used by Citibank in earlier tests.
Step in the Right Direction
Ameritech and Nynex described their projects as demonstrations of how telephony and banking - and other services in the future - can be blended to bring a new level of sophistication to consumer communications.
Ameritech's 200,000-household program "is a major undertaking, and we have spent millions on it." said Steve Ford, an Ameritech spokesman in Chicago. "This may not be the information superhighway we have been hearing about, but it is a major step in that direction."
Both regional projects are employing a screen technology called "analog display services interface" that prompts users with both visual and voice instructions. The technology was developed by the seven regional Bell companies' Bellcore research unit in New Jersey.
|Visual Voice Mail'
One capability it makes possible is "visual voice mail." Information about messages left by callers, such as time, number, and message length, would be displayed on the telephone's screen.
The Nynex project began last March. with several phone company employees in Rockland County, N.Y., testing the device's feasibility for gaining access to advanced communications features like caller identification and three-way conversations.
On Nov. 3, the first of an eventual 300 Rockland County households with Philips Screen Phones was able to use Citibank's Direct Access home banking services.
Phones Are Universal
Direct Access was designed a decade ago for owners of personal computers. But perhaps only one household in 10 is equipped for banking and other PC-based information services. Since virtually every household has a telephone, Citicorp and others are pursuing the broader market with a phonelike device.
Steve Price, the executive in charge of Citibank's U.S. branch network, said the company views home banking as an extension of the convenience that began with 24-hour automated teller machines.
The screen phones, with standard alphabetic and numeric keyboards and push-button prompts adjacent to the screen, "will give our customers one more alternative in how they choose to deal with us," he said.
"We want them to have full knowledge of and access to their accounts anytime, anywhere, in any way."
Citibank's phone menu will consist of account statements, balance inquiries, bill paying, funds transfers between accounts, and investment services, including buying and selling stocks.
Citicorp is not alone in championing screen phones. NationsBank Corp.'s subsidiaries in Baltimore and Washington, formerly part of MNC Financial Inc., launched a screen phone service in May 1992 and have signed 4,000 customers.
The NationsBank units have declared the program a success in both attracting and retaining customers. The phone, made by Online Resources and Communications Corp. of McLean, Va., costs about $90 and uses screen prompts similar to those on automated teller machines.
Citicorp and others - including Bank of Boston Corp. in an alliance with Northern Telecom Inc., and Barnett Banks Inc. with Apple Computer Inc. and BellSouth Corp. - opted to develop more sophisticated devices. Their higher costs, however, are among the stumbling blocks that the companies are hoping to overcome in the test phases.
Meanwhile, Citibank and others continue to offer PC-based services for the high end of the market. Unsure of how home banking might eventually shake out, many bankers want to be prepared for multiple delivery channels that might also include interactive television.
Speaking in September at a Bank Administration Institute conference, Robert J. Tuttle of Philips Home Services said his screen phone's single-unit cost was a clearly prohibitive $600. But in large quantities, "we are looking to bring it under $200," he said, which is generally viewed as affordable.
Mr. Ford, the Ameritech spokesman, said the company will buy the devices from Philips and may offer them for resale, lease, or both. It is considering the pricing options, he said, but any purchase price would be under $200. A lease would cost under $10 a month, which is comparable to what personal computer subscribers pay to include banking in PC-based service packages like Prodigy.
Mr. Ford described Ameritech's relationship with Philips as that of "buyer and supplier," and its marketing tie-in with Citicorp as an "alliance." The latter relationship will be exclusive for a trial period, after which other banks could use the utility.
In 1992, Ameritech worked with Banc One Corp. and U.S. Order on a home banking trial in Detroit.
Citicorp had been working directly with Philips for at least three years on a device initially designed by Citicorp and known as ET, or Enhanced Telephone. Citicorp never wanted to manufacture terminals on its own, and it now routinely enters into alliances that further its strategic objectives.
Vic Cunningham, Nynex's director of new product development, said its screen phone effort is a joint undertaking with Citicorp, Bellcore, and Philips.
He said a major goal of their trial is to measure customers' comfort level with technology. Electronic telephone directories and other services would then be added to the calling and banking services currently available.
