Chase Manhattan Corp. has repackaged several home banking products and services into a comprehensive service offering.
The service, called ChaseDirect, is a "remote banking channel" that offers customers round-the-clock, full-service banking seven days a week by telephone, PC, fax, or automated teller machine.
Tailored to the needs of its high-end clientele, ChaseDirect waives most home banking and ATM transaction fees, provided the customer maintains $6,000 in Chase accounts. Customers with balances below the minimum are charged $20 a month.
Observers interpreted the repackaging as Chase's competitive response to Citicorp's recent renunciation of most fees associated with retail electronic banking transactions. Citi, however, imposes no balance requirement for free electronic transactions.
Some asserted that Chase would be only the first of many institutions to respond to Citi.
"Clearly, it's a response to Citibank," said Alan Bergstrom, a managing director at Dove Associates, a Boston-based consulting firm. "Chase is trying to take some of the shine off of what Citi has done."
In a broader context, however, Chase's move is also part of a movement in which banks are getting more serious about persuading consumers to use electronic delivery channels.
Electronic transactions, such as those at ATMs and by telephone, are much cheaper for banks than services provided by tellers.
The strategies for moving transactions out of the branch range from Citi's dropping of fees to First Chicago Corp.'s decision to charge for some teller transactions.
In Chase's case, the new service could also produce revenue, experts said.
"It sounds as if Chase's (service) is structured so that it won't cost them as much money, and may perhaps even be an income generator," said Mr. Bergstrom.
Characterizing the new service as a "relationship builder," Chase will initially target 200,000 households in the New York area. It will have 21 agents specially trained to handle customer transactions.
With these agents, Chase is giving ChaseDirect customers a central point of personal access to services and a place to ask questions that cannot be answered electronically. These representatives will keep information on ChaseDirect customers' complete relationship with the bank, averting the need for customers to talk to different departments.
Joel L. Epstein, an executive vice president at Chase, said the service "indicates the direction that we want to go, which is not only high-tech access but also maintaining personal relationships with customers."
ChaseDirect also offers interest-bearing checking and options to sweep funds into money market or mutual fund accounts. Qualifying customers will get complimentary, no-annual-fee credit and Visa debit cards, as well as discounted rates on other bank products.
"It's an alternative to traditional banking," said Mr. Epstein, adding that the service is "designed to attract new customers within the tri-state area and eventually nationwide."
Ray Greenhill, president of New York's Oxxford Information Technology and an expert in marketing and strategy, said Chase's service has a slightly different goal than Citi's.
Noting that most of a bank's profits are derived from a relatively small group of customers, he said, "I think Chase's move, in some ways, is smarter."
"As far as I can tell, the only difference is that Chase is tying in a group of products that they can cross-sell, (while) Citibank is basically trying to eliminate the use of tellers," Mr. Greenhill said.
