Ronald A. Braco is intent on pushing Chemical Bank into card technology's 21st century, even if he has to do it singe-handedly.
But it doesn't seem likely to come to that. After almost 20 years in consumer banking, operations, credit cards, and electronic banking - and thanks to his involvement in Chemical's development project with AT&T Smart Cards-Mr. Braco is gaining stature and responsibility inside and outside the bank.
About a month ago he was promoted to senior vice president, a sign of visibility and support from above.
"We haven't been known for this kind of innovation, but that is clearly changing," Mr. Braco, 44, said in an interview last week.
Hanover Veterans
Edward D. Miller, a highly regarded, technology-savvy retail banker, recently rose to president of Chemical Banking Corp. after 30 years there and at its 1991 merger partner, Manufacturers Hanover Corp. Mr. Braco, also a Manufacturers Hanover veteran, worked with Mr. Miller earlier in their careers. Mr. Braco managed the postmerger branch banking transition team.
Spreading his influence beyond the New York-based bank, Mr. Braco has become chairman of the financial services working group of the Smart Card Forum. The multi-industry forum, which aims to promote market tests of cards enhanced with computer-chip memories, has been more closely identified with Citicorp, which has an unmistakeable innovation pedigree.
Ranks Above Chairman
Perhaps of symbolic importance, and a statement of Chemical's seriousness of purpose, Mr. Braco now has a job title higher than that of the Smart Card Forum's chairwoman.
She is Catherine A. Allen, a Citibank vice president and leading organizer of the forum. After the forum incorporated this year, grew rapidly to more than 70 members, and developed an increasingly crowded agenda, Ms. Allen turned the financial services working group over to Mr. Braco.
"I was looking for volunteers, I wanted a banker in that role, and I was very pleased Ron stepped forward," Ms. Allen said. "He is a go-getter, has clear objectives, is knowledgeable, and understands the importance of working cooperatively - which he learned in his work early on with automated teller machine networks.
"This also sends a message to the world that Citibank and Chemical can work together."
Poised for Key Role
If smart cards make significant inroads in banking or payment applications, as many of the technology's proponents anticipate, Mr. Braco's working group could play a key coordinating role among the participants.
Like the Smart Card Forum as a whole, the financial services team works on the assumption that no one company or narrow interest group can carry off a successful program -- particularly one that encompasses multiple applications, such as telephone and vending machine transactions.
The forum is interested in fostering "interoperability" standards and market tests while leaving actual product innovations to participating organizations and alliances.
Security Requirements
One of the financial services working group's immediate priorities is to define the security requirements of a smart card payment system.
"We think that banks will have to take the lead on security and encryption," Ms. Allen said.
"Our job is to make the business case," mr. Braco said. "Then we would turn it over to the [forum's] technology working group to deal with how to make it work."
Working on the business case at Chemical Bank, Mr. Braco is not following the industry pack.
Chemical became the first to hook up with American Telephone and Telephone Co.'s smart card unit on a banking trial of its "contactles" technology. The cards do not have to be inserted into, and make direct contact with, a card-reading device.
No Moving Parts
Most chip card activity to date has involved conventional cards with exposed metal contact points, but AT&T argues that its systems are more reliable and durable because they lack moving parts. The approaches coexist within the Smart Card Forum, whose members include Chemical and AT&T as well as many exponents of contact-based systems.
Ms. Allen said contact systems have an early market advantage due to their lower costs and to the proprietary nature of AT&T's contactless cards. "Eventually, I could see us moving toward a standard for both," Ms. Allen said.
Mr. Braco and Diane Wetherington, president of AT&T Smart Cards in Somerset, N.J., went public with their alliance Nov. 17 during the Bank Administration Institute's retail delivery systems conference in New Orleans.
Test in Cafeteria
The joint venture will start small in the first quarter next year, with Chemical issuing cards for use in an employee cafeteria. The chips will carry cash value, replenishable at automated teller machines and debited at the point of transaction.
Assuming the test succeeds, the bank and AT&T plan to expand the card's capabilities and begin offering them to customers before the end of 1994.
"Smart cards can, and probably will, change the entire nature of consumer banking," Mr. Braco said in November. "We see the smart card becoming the primary vehicle for delivering transaction and information services to our customers.
"A single smart card can serve as debit, credit, and ATM card, all in one he added. "Customers can access the cards from ATMs, telephones, interactive TV sets, and merchants' point of sale terminals."
Confident of Switch
"We fully expect all banks to migrate to smart cards that will be capable of much more than today's ATM cards, said Ms. Wetherington of AT&T.
Mr. Braco said the project with AT&T Smart Cards -- building on Chemical's long-standing relationships with AT&T and its NCR Corp. subsidiary -- already has a track record.
"We only started talking in June, hoping to have an announcement by the retail delivery systems conference, and we made it," Mr. Braco said.
Mr. Braco's Chemical responsibilities, as director of electronic banking services, include automated tellers and home banking. But he says he is spending half his time on smart card activities, and he bristles at those who regarded the recent announcement with AT&T as nothing more than a tentative technology trial.
"It's much bigger than that," Mr. Braco said, noting that the eventual target for smart cards is the 70% of transactions currently done in cash. "If it were just a cafeteria test, we wouldn't be doing it."
