Citibank Plans Debut For Enhanced Phone
After months of testing, Citibank said it aims to roll out a specially designed telephone late this year in an attempt to stimulate home banking.
Citibank said the so-called Enhanced Telephone should catch on fast with customers who have shunned attempts to persuade them to pay bills and get account information via personal computers in their homes.
A Citibank spokeswoman said the new phone banking service could be offered in the New York region by the end of this year if the special telephones are delivered by the manufacturer before Christmas.
The bank is expected to offer the service in its other retail markets, too, but no timetable has been set.
Citibank has been testing the enhanced phone with customers in New York since March 1990.
"We are moving along, and the significant tests will be done soon," said Richard McCrossen, head of the global consumer distribution services division, which provides the technical support for retail banking.
Citibank is the first in the industry to announce home banking, including bill payment, using a modified telephone rather than a personal computer or a standard telephone.
The bank said it believes the service will eventually reduce the need to open new branches, helping keep down the rising costs of retail banking.
Citibank and other banks have tried repeatedly to interest people in bank-at-home services but have failed to attract significant numbers of customers. Citibank has 35,000 people using its PC-based service, called Direct Access, a tiny fraction of its retail customer base.
Citibank's Enhanced Telephone, which includes a a small display screen, will let customers pay bills, review balances, and perform other routine banking tasks at home. It will be built for Citicorp by Philips N.V. of the Netherlands. In tests with 400 Manhattan customers, many of whom had used PCs for home banking, the enhanced telephone got much more use, the bank said.
Added Costs for Customers
One hurdle Citibank may have to overcome is the added cost to customers. For the test, the bank leased the phone for a one-time installation fee of $49.95 and a $9.95 monthly charge. The bank has not decided what the charges will be when the service is made available to all customers.
Huntington Bancshares Inc. in Columbus, Ohio, plans to roll out a service using a similarly modified phone. But testing will not begin for at least a year. Huntington plans to use phones from American Telephone & Telephone Co. That device is still under development.