Citicorp Centralizing Service Telephone Inquiries Will Be Routed to San Antonio
Citicorp has announced plans to establish a single telephone center to handle customer service for all its retail banks, as part of its extensive bank-office consolidation.
The New York bank said last week that it will set up the center in San Antonio, Tex., in mid-August. By yearend, the bank plans to have a staff of 100 that will be able to answer retail customers' questions about any account, regardless of which branch handles their business.
The bank will also finish by the end of this summer its consolidation of nine retail data centers into one center, which will be in Weehauken, N.J. Still in the works is the rollout of a common set of computer applications for all retail offices.
Motivated by Cost Concerns
The massive undertaking is designed to lower operating costs of the bank's retail arm and offer uniform products and services throughout the country.
Citicorp, like virtually every other bank, is concerned with cost cutting. And a prime way to reduce expenses is to centralize processing and standardize operations as much as possible, a difficult task for banks that have grown through acquisitions.
Citicorp's retail plan, which centers on consolidation of operations and systems, is part of a plan the bank calls Distribution 1990.
A similar approach to centralized service fueled the growth of the bank's credit card business when it centralized processing and service in the 1980s. The head of the new effort, Richard McCrossen, came over in January from the credit card operation.
"I believe there is a real opportunity in trying to leverage the fixed costs, reduce the unit cost, and at the same time provide different levels of services," said Mr. McCrossen, the division executive for global consumer distribution services.
Mr. McCrossen declined to state the expected savings. But he did say that consolidation of processing and services could reduce the unit costs of delivering products by as much as 30%, based on his experience with the credit card business.
"The cost of doing processing and development one time in one processing center is a compelling reason to do this," said Michael E. Balk, a banking consultant with Price Waterhouse in New York. "You have the ability to eliminate whole sets of software and data centers."
For example, Citicorp's retail operation, involving both banks and thrifts, operated under a potpourri of computer systems. As a result, the electronic support for new products had to be built individually for principal markets in Chicago, Florida, Washington, D.C., and California - a waste of time and money.
The customer service center itself is a consolidation of smaller centers in each market. While there are savings from providing this function from under one roof, more substantial cost reductions will come from the consolidation of data centers and the eventual rollout of a common set of systems for all retail banking, Mr. McCrossen said.
The New York retail bank will set up a service center in San Antonio in temporary quarters. The bank plans to build a new service center by early 1992 to eventually house a staff of 650.
A Marketing Effort
The back-office projects have been accompanied by a variety of marketing efforts aimed at offering a single set of products and a uniform look to the branches.
The bank now offers its integrated CitiOne account in all its retail sites - banks and thrifts alike. Even the signs outside branches are now the same throughout the bank's nine markets. Citicorp's savings banks are now called Citibank, which is allowed under the loosening of federal regulations.
Mr. McCrossen said the back-office strategy and a uniform set of products will not directly affect customers who use local branches. But he sees processing costs as cheapest when the retail products in each market are the same across the bank.
"From my perspective, 85% of products are similar," said Mr. McCrossen. "Our objective is to provide that 85% in a consistant way."
And if banks get full equity underwriting privileges, they must compete with the retail distribution systems of investment banks already accustomed to operating nationally, with integrated back offices.