Senior technology executives at Citigroup and Chase Manhattan Corp. aired differing views of how corporate power will accumulate in an electronic commerce world.

Denis O'Leary, executive vice president of Chase and deputy head of national consumer services, said the race will go to the huge.

Edward Horowitz, Citigroup corporate executive vice president, spoke of a decentralized, bottom-up evolution that will benefit "nimble companies that are not invested in doing things the same old way."

The contrasting visions spiced up the opening sessions of American Banker's Online '98 conference.

Speaking Sunday evening, Mr. O'Leary said bigger "is the place to bet." He said banks have a lot of room to grow, given that no institution has even a 10% share of the national market. It is common in other industries for the top five competitors to control 50% to 80%.

If banking follows other industries' patterns, entities will emerge "with unprecedented scale and capabilities that are off the charts by today's standards," Mr. O'Leary said. Their scale, combined with the power of networks, will create an "exceptionally fertile market for information technology deployment," he said, and even the new Citigroup "is not at the scale necessary" to guarantee success.

Mr. Horowitz said Monday that the challenge to Citigroup, the result of the Citicorp-Travelers Group merger this month, is to mimic the nimble companies that will reign in the emerging networked economy. That requires building a systems architecture from "a clean sheet of paper."

While maintaining its legacy computer systems to serve 70 million current customers, he said, Citigroup aims to "acquire the next 700 million" toward its goal of one billion customers worldwide "at half the cost."

The executives also differed on the value of Internet portal sites to financial service providers. Citigroup is a believer in this gateway concept, having signed as an "anchor tenant" on Netscape Communications Corp.'s Netcenter. That exposes Citigroup to "45 million sets of eyeballs every month," he said.

"In the electronic commerce space, due diligence is put in the hands of individuals," Mr. Horowitz said. "Each individual is going to research their own financial services using a browser."

Mr. O'Leary questioned the value of partnerships with portals such as Netscape, Yahoo, and Excite.

"Paying lots of money to get surfing eyeballs doesn't have great appeal," he said. Banks should emphasize their own "content, competence, capability, and trust."

He conceded that some consumers may turn to portals for shopping and comparing, but for basic home banking capabilities, they would turn to their bank.

Mr. O'Leary argued that financial institutions should get into selling space on their Web sites, because their customers will be motivated buyers.

Agreeing with Mr. O'Leary on one fundamental point, Mr. Horowitz said, "We have to get a deeper understanding of what the customer wants."

Harking back to his experience with the entertainment conglomerate Viacom Inc., he said, "If the first six seconds of a TV show are not compelling, the entire audience can shift. We better figure out how to tell a story."

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