With its official launch last week of home banking in the Washington area, Citibank underscored its intention to stay a step ahead of the pack in bringtng new technologies to the consumer market.
While the bank had never really strayed from its perch as a technology leader, neither did it call much attention to its experimentation with smart cards, screen-based telephones. and home computers.
Suddenly, such advanced delivery systems that had been in consumer tests are in or near formal market introductions, and the strategy is in fullest flower in the capital region.
In its Direct Access Banking program, described in a brochure called "Banking Without Boundaries;' Citibank is marketing services via both card-activated screen telephones and personal computers, letting individual preferences come to the fore.
More often in the still emerging world of home banking, screen phones and PCs are seen as an either-or proposition. Many bankers prefer the enhanced telephone as a way to ease the mass market toward full computerization.
Even as Citibank is trying to make a big splash with the Philips Screen Phone, which the bank helped design, it plans to give away tens of thousands of "demo disks" to familiarize PC owners with the banking software. "We thought it was about time we did what Prodigy and Compuserve and America Online do to promote their products," said Citibank vice president Walter Greenberg.
Citibank has been offering PC banking since 1984, but now it is fully integrated among delivery options ranging from traditional branches to what the institution calls "global access."
What's more, Citibank is going after the Washington metropolitan market so aggressively, with direct mail and other promotions of phone- and computerbased banking, that it expects to pick up market share.
"This is the first full-scale home banking rollout [aimed at] customer accluisition," said Mr. Greenberg. "We have, of course, introduced these services in New York and Chicago, but unlike here, we were not basing those business cases on customer acquisition."
Citibank and its parent, Citicorp, got a lot of attention in recent years for reversing their go-it-alone approach to delivery systems.
The bank made headlines by decicling, for example, to join regional automated teller machine networks and cross-industry discussion groups like the
Smart Card Forum.
In that sharing mode, the New Yorkbased company was also forming partnerships with Philips Home Services, the Dutch owned manufacturer of high-tech telephones, and with several regional Bell operating companies to bring out home-biased services that might provide a competitive edge.
Washington will be a key test of the remote, non-branch-dependent delivery strategy that Citibank people often describe as virtual banking.
As explained in the Direct Access Banking brochure, the aim is "let[ting] you manage your money more conveniently, on your own schedule - giving busy people like you the ability to bank anytime, anywhere, any way."
The Citibank-Philips Screen Phone is going head-to-head with devices manufactured by Online Resources and Communications Corp. of McLean, Va.
NationsBank is marketing the on-line home banking service in the WashingtonBaltimore corridor and has slated a wider distribution throughout the Middle Atlantic states this fall.
Citibank's thrift has 28 branches in Maryland and Washington and none in Virginia, placing it at a decided disadvantage against NationsBank but giving it a chance to see if home banking can fill the gap and move market share. "This market may already be somewhat sensitized to screen phones, thanks to the' Online Resources product," said Robert Baublitz, manager for home-based services at Bell Atlantic in Arlington, Va.
Bell Atlantic is the third leg of the partnership with Citibank and Philips, playing a role in Washington parallel to that of Ameritech in Chicago and Nynex in New York.
Speaking last week at the Bank Administration Institute's home-based services forum in Washington, Mr. Baublitz said the three parties make welldefined contributions: Citibank provides the financial services package and essentially acts as reseller of the Philips phone; Bell Atlantic provides the technology that allows voice and data to travel over existing phone lines, as well as call management services such as automated directory assistance, Caller ID. Call Waiting, and Three-way Calling.
"Citi's positioning is well known, and Philips offers the highest-quality [screen telephone] set," Mr. Baublitz said. "It's all synergistic with what we're doing."
"As other applications become available, the package will become more valuable to our customers," Mr. Baublitz added.
Mr. Greenberg is also a big fan of the Philips technology, saymg its features and functions, from screen size and built-in keyboard to menu-driving "soft" keys and smart card reader, outpace Online Resources' and others' products.
But the Philips phone costs several times the $99 that Online Resources says its ScreenPhone 220 can be profitably sold for. Citibank and telephone company officials say $200 is their target price.
Mr. Greenberg acknowledged that the Philips product still has to be subsidized because it is not yet a viable sales proposition, even at factory cost. And he said Citibank will be exploring the use of other devices.
In the Washington rollout, Citibank is employing relationship pricing. Customers with total footings above $50,000 can get the screen phone, and the PC software for that matter, at no fee. Balances between $10,000 and $50,000 require a $10 monthly lease payment for the phone.
Users with less than $10,000 in the bank have to pay $50 up front, $10 a month for the phone, and a $7.95 banking fee, which is comparable to the basic charge for other PC and screen phone banking packages.
Mr. Greenberg said results of the Washington rollout will influence what Citicorp does elsewhere. "We learn from New York and Chicago, and they will leverage what we're doing here." he said.
In New York, he said, the number of branches promoting the Philips Screen Phone service, now about 18, will double in early October. It should be available through all of the more than 200 New York metropolitan branches by yearend.
In Chicago, where Citibank arranged to be the first bank to offer services through Ameritech-marketed Philips phones, the number of branches involved is under 13, Mr. Greenberg said. But next month, all 52 are expected to be in the program.
Citibank affiliates in California and Florida have not yet joined the home banking parade, but Mr. Greenberg said planning is well under way.
