Most bankers consider the Internet a delivery channel through which customers can access accounts, pull down product information, maybe even execute trades soon. Their sites are built like virtual branches; some banks use graphics on their sites mimicking brick and mortar. Not Citibank, which until now hosted a site that's more akin to an electronic billboard than a virtual branch. To Citi, the Internet is a global communications channel, and therein lies its Web banking strategy.
Citi, which has refrained from establishing a meaningful Internet presence during these initial "gold rush" years, is finally executing an Internet strategy. And while its much anticipated Internet banking transaction capability should air by year end, more important is the retail giant's multi-phase, potentially multi-million dollar relationship with The Mining Company. The objective: Build Citibank.com into a global community where chat rooms, forums, and Internet guides converge to discuss Citi's breadth of product. Eventually the site will be expanded to help visitors gather information around any area of interest.
Citibank is creating a content delivery channel focused initially on financial services but ultimately on the gamut of interests expressed by customers. "What we're trying to acknowledge with The Mining Company deal is there is more to content creation on the Internet than just having it broadcast by one source of information," says Josh Grotstein, who has been recruited from Prodigy to lead Citibank's Internet development as division executive of Internet and intranet programs. "Certainly, you need to have stock feeds and news feeds and things like that, but the real essence of the Internet is the community aspects where people talk to each other and build content themselves by communicating and building a sense of communityonot just making this a one-to-many broadcast model, but a many to many."
The Mining Co., based in New York, facilitates Citi's objective through its guide-based Internet information retrieval services. The Mining Co. represents an alternative way for consumers to gather information, where people respond to information queries rather than search engines. The Mining Co. currently has more than 500 guides responsible for specific areas of interest. The guides list the most interesting places on the Web that cater to their assigned topics and publish a resource list identifying all the sites they've found that cover these areas. They also write weekly columns and host chat rooms to further discussion in their areas. "The results on the (Net) search engines are a B-. When you do a natural language question to a guide, your odds of getting an A+ response are much better," says Scott Kurnit, CEO of The Mining Co.
The exclusive relationship forged by Citibank with The Mining Co. has been mapped for the next two and a half yearsomeaning that no other financial services company can work with the Mining Co. in that time frame. The first phase of the deal will be to train Citi employees to become guides in selected product and service areas. The areas are in the process of being selected and will likely include lending, credit cards, and personal finance.
Citi will leverage The Mining Co.'s expertise in the "guide model of community building," employing its training methods so that Citi staffers can develop bulletin boards, chat rooms and communities based on their financial areas of expertise. Further, Citi will develop guide sites focused on consumers' expressed interests. Eventually, Citi will develop more "agnostic" sites where consumers can get strategic financial services information such as debt management or budgeting for a vacation. Beyond that, Citi would like to extend links from its site to related areas at the Mining Co., such that consumers budgeting for a vacation can click to The Mining Co.'s travel guide to pursue an affordable getaway. Further, Citi would like preferred ad space at The Mining Co., so that consumers chatting with the car guide can link to Citi if they're interested in a car loan.
So what's the downside? "The downside would be that Citibank has proprietary products," says Mildred Wulff, an analyst in Jupiter Communication's digital commerce group. "Consumers usually want to go to the Web and comparison shop. If they're looking for a mortgage, they'll probably go to Citibank, Chase and a lot of other banks to see who's offering the best rates. In the long run, they will probably see that they'll have to offer competing products in their communities to retain their user base." Citioa notoriously proprietary shopois not planning for such an offering at this time.
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