Citigroup Inc. is trying to go back to the future.

Executives at its U.S. retail banking unit have huddled for seven months to conceive a "Bank of the Future" strategy that would offer Internet and cell phone portals as a complement to its branch services, people familiar with the matter said.

The effort is reminiscent of 1997, when, under then-chief executive officer John Reed, the predecessor Citicorp unveiled a short-lived plan to do away with branches wherever possible by pushing more customers to personal computers, telephones and automated teller machines (a technology that Reed helped proliferate).

However, unlike Reed, the current Citi CEO, Vikram Pandit, does not plan to get rid of the banking company's branches.

The company has hired Michelle Peluso, who helped modernize airline reservations as the chief executive officer of Travelocity.com, to lead the discussions.

Citi's strategy-planning project, which was initially known as Bank of the Future and later given the official name "Citi Forward," is overseen by Teresa Dial, a former Wells Fargo & Co. executive that was hired by Pandit in March 2008 to run the U.S. consumer division. The unit had $1.76 billion of revenue in the second quarter, down 17% from a year earlier.

In an Aug. 27 memo to staff, Dial wrote that there's a "significant and immediate opportunity to embrace a more client- and customer-centric approach across our product lines and delivery channels." Key elements of the "service model" include "technology, the Internet and mobile," she wrote.

Liza Landsman, a former International Business Machines Corp. executive who has worked at Citi for nine years, was named to head the Internet and mobile banking team, according to the memo, which was confirmed by Susan Thomson, a spokeswoman for Citi.

Peter Knitzer, a 13-year veteran who previously oversaw marketing and Citibank Online, will leave the company later this year, Dial said in a separate memo Aug. 26.

Thomson declined to discuss specific products or services being developed under Citi Forward.

A related effort, known internally as "Project Harmony," aims to consolidate Web portals for personal banking and credit cards, so customers do not have to log in separately, people familiar with the matter said.

Some other banks, including JPMorgan Chase & Co. and Bank of America Corp., already offer single sign-ons.

Earlier this year, Dial hired Peluso, who was Travelocity's top executive from 2003 through January, as a part-time consultant. Peluso previously worked at Boston Consulting Group and also served as a White House fellow in the late 1990s.

Employees picked for the project were told in February to gather for lunch in an executive dining room at Citi's headquarters, the people familiar with the matter said.

Peluso opened the meeting by saying that she had just bumped into Citi Chairman Richard Parsons, who told her that he was excited about the project and that it was important to the company's future, according to two people who attended.

Parsons did not respond to a request for comment.

Dial arrived later in the meeting and said she wanted to prove that having a smaller branch network than some of its banking rivals could be a competitive advantage, two people familiar with the matter said.

Dial was not available to comment.

The Citi Forward group has been meeting about twice a week, one person involved in the process said.

In the Aug. 27 memo, Dial wrote that she was searching for a new chief marketing officer to play a "critical role in helping us define the future for North American consumer banking and earn the right to our customers' lifetime business."

Peluso is working for Citi under a consulting agreement, according to the Aug. 27 memo.

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