Citicorp's High-Tech Phone Is Ready
Home Banking Project Handed to Marketing Team
Citicorp's new home banking service using specialized telephones is out of the development stage and will now be managed by the company's national marketing group, bank officials said this week.
The company's Citibank subsidiary has not disclosed its plan for rolling out the service across the country, but it may be eyeing Chicago, Citicorp's second-largest consumer-banking market.
Talks with Ameritech
A spokeswoman said the banking company has had discussions with Ameritech, a Chicago-based regional telephone company, about offering the telephones, called Enhanced Telephone, or ET.
"We are simply exploring different ways of marketing ET," said Susan Weeks, a Citibank spokeswoman.
The service, which uses a special telephone equipped with a small screen, allows customers to pay bills, check balances, and perform other routine banking tasks at home.
Last fall, the bank expanded the service to include stock and bond information. Instructions and menus appear on the screen, and customers use the telephone's keypad or a small, attached keyboard to enter account numbers and other data.
Citicorp in Front Rank
When Citicorp first announced the program, it caused a stir in the industry because it was one of the first to deliver home banking using a modified telephone; other services use a standard telephone or a personal computer.
Previous PC-based home banking programs failed to attract many users. Citibank has 40,000 customers using its PC-based service, called Direct Access. It also markets Focus On-Line, a telephone-based bill-paying system.
The company hopes eventually to coax more customers to sign up for home banking with the enhanced telephone. Citicorp leases the terminal for a one-time fee of $49.95 and charges a $9.95 monthly fee.
Another advocate of computerized telephones is Huntington Bancshares Inc., Columbus, Ohio. Huntington plans to roll out a similar service this year using an advanced phone made by American Telephone & Telegraph Co.
Development to Continue
A Citicorp spokeswoman said the development division, based in Stamford, Conn., will continue to develop applications for the service. But the Enhanced Telephone Service unit, which oversees the service, will be folded into the national marketing group, which works to market products and services through the branch banking businesses in New York City and other markets where Citibank conducts retail banking.
Citicorp is testing the service in New York with 324 customers at two branches in Manhattan. A plan to offer the telephones to other customers in New York by yearend is "on schedule," but a Citicorp spokesperson declined to say which branches would have it.
Citibank officials close to the project say decisions regarding the project are being delayed by the transition from the development group to the national marketing unit.
Philips to Produce ETs
A Citicorp research and development unit based in Los Angeles developed the ET and made the phones being used in the New York test. But the unit will not produce any more equipment; the bank has a contract with Philips N.V., a Netherlands electronics company, to make the devices.
Meanwhile, officials in the bank's Enhanced Telephone Service unit said that, among all the device's functions, customers use the bill-paying feature most.
"We had 82% of the customers doing electronic payments within the first two months," said Catherine Allen, vice president of the enhanced-telephone project. "Citibank believes that ET is going to be a real jump start to getting consumers to use electronic payment devices in the home."
Ms. Allen said that a recent survey by Payment Systems Inc., Tampa, Fla., showed that customers are becoming more interested in paying bills by telephone. The survey of 2,500 households found that 43.7% would use an enhanced telephone to pay bills from home if the service were available.
However, 84% expressed a desire to buy the service from a telephone company rather than a bank.
Citicorp's Enhanced Telephone Project
From January to March 1991 Number of customers:
324 Total value of bills paid:
$2.6 million Average number of payments a month:
20 to 40 What bills customers are paying:
Cable TV Source: Citicorp