Citibank is halfway through a little-publicized but vigorous effort to transform its branches from traditional transaction-handling sites into financial "advice centers."
In New York City alone, the Citicorp subsidiary is investing about $125 million to create 100 "model" branches by 1997.
The effort promises to be one of the most extensive among major U.S. retail banks. While the strategic direction is not unique - seven of 10 senior bankers in a recent First Manhattan Consulting Group poll said they needed to significantly reengineer their retail distribution channels - Citibank has made far more than average progress.
Undistracted by merger deals, and with 80% of its retail transactions already electronic, the bank has been able to concentrate on well-defined reeengineering objectives. And given Citicorp's global reach, the changes in retail strategy could have a far wider competitive impact than those at any other U.S. retail bank.
"Citicorp has certainly been on the forefront of changing the way its branches are used," said Diane Glossman, an analyst at Salomon Brothers Inc. She viewed the "accelerating" changes as an attempt to sell higher- margin products and services through the branch system.
Citicorp is notoriously mum about strategy, and the "branch of the future" blueprint has just begun to emerge as the bank reaches the midpoint of its construction spree.
Automated teller machines still sit at entrances for customers who want to zip in and out, but these are supplemented by "greeter stations," where service representatives direct customers to offerings within.
Sit-down stations for financial services - from private banking to brokerage advice - are laid out prominently in a color-coordinated landscape. The glassed-in teller windows have receded into the background.
"You're putting the transactional capability up front for people to choose, but at the same time you're getting much more emphasis in terms of staff numbers," said Susan Weeks, a Citibank spokeswoman.
Bank officials said the overhauls are not aimed specifically at discouraging ordinary transactions, such as cashing checks. Rather, the bank wants to create environments in which it can make better use of the time that customers spend.
In its emphasis on improving customer convenience and "relationship management," Citbank's objectives have included the following:
* Creating 1,200 "model branches" in 39 countries with a uniform look, design, and functionality.
* Keeping branches open longer hours on weekdays and, in residential neighborhoods, instituting weekend hours.
* Continuing to build the ATM network. While the number of Citibank branches in New York is declining, ATMs are increasing and will soon be equipped with more advanced functions, like the ability to perform wire transfers in any currency.
* Dropping fees for electronic banking, such as computer and screen phone access, and advertising the products heavily.
* Training employees in customer support and bank products. Tellers - now known as customer service representatives - are being taught to become "customer relationship managers," with greater responsibilities.
"There has been a tremendous investment in technology that's transparent to the customer," Ms. Weeks said.
The bank has stepped up its interest in staff training over the last year, said Suzanne Biegel, a partner at Internal and External Communication Inc., which has provided Citibank with computer-based staff training programs since 1988.
"Workstations are being put in every branch," Ms. Biegel said. "The bank's goals are to cut across the barriers of time zones and distance, to reach a geographically diverse work force."
The changes have brought about improvements in customer service, Ms. Weeks said. Tellers who previously had to send customers to a separate line to register a change of address can now complete the transaction themselves.
The bank is courting customers in other ways. Last week, to celebrate the opening of a "model" branch in Manhattan, Citibank brought in chefs from six of the city's top restaurants to whip up gourmet delicacies, and hired a jazz trio. The husband-and-wife founders of the Zagat restaurant guides also were on hand, distributing free copies of their New York survey embossed with the bank's name.
"The whole idea is to have all the branches look uniform, so the customer can go into one anywhere in the world and know what to expect and feel comfortable," said Frank Augustine, manager of the branch.
He said he wasn't sure how much the six-month face-lift of his branch had cost. "My job is to bring business into the bank," he said.
Another manager of another branch, who spoke on the condition of anonymity, said the bank was planning to spend $1 million to renovate that facility later this year. The cost had gone up from $700,000.
"Citibank is targeting New York's 'emerging affluent' - the entrepreneurs, and people who need financial help and education as well as transactional capabilities," the manager said.
The prototype for the "model" was hatched by a branch manager in Chile. From now on, "any time we're setting up a new branch, it is only being set up as a model branch," Ms. Weeks said.
Though Ms. Weeks resisted describing all the components of a model branch - "We certainly don't want to give a template to our competitors," she said - people who have watched the program unfold say they are beginning to see the master plan.
Bernell Wright, an independent consultant who used to work at Citibank, said the "repurposing" of the branches seemed designed for competition with financial services rivals, including mutual fund companies.
"The more that office looks like a Fidelity, the more likely it is it will sell like a Fidelity," Mr. Wright said.
The cosmetic changes were also meant to instill confidence among customers that the bank could handle money management, he added.
"What you're seeing is a bank that has been there, done that, gone through it, and reconciled what its mission is," Mr. Wright said. "Whether or not that mission is the correct one, the market will decide."
Analysts said it was too early to judge if Citibank's investment would pay off.
Liam Carmody, principal of Carmody & Bloom in Ridgewood, N.J., said, "Your dentist can make his office very plush, but that doesn't mean you'll want to go there."
