InformationWeek
Defining The Business Value Of Technology
May 3, 1999
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In addition, the company is developing a common networking platform among its banking, credit-card, insurance, and brokerage services so that customers can easily switch from one type of service to another while making a cellular transaction. "The long-term goal is to let people use their cell phones as virtual credit cards, to do banking, sell stocks, and buy insurance," Young says. "We'll tailor individual services to customer needs. As long as they can authenticate themselves, we'll deliver information to them on demand."
Citigroup is also experimenting with financial services delivered via digital cable TV using set-top boxes. It has begun discussions with cable operators to provide the service to subscribers. Last December, Citigroup signed a deal with TVN Entertainment Corp., a provider of pay-per-view programming, to develop hardware and software for a suite of banking, brokerage, and insurance products for the effort.
Phase one of its project with TVN, in which the companies programmed retail-banking functions onto a digital set-top box, was recently completed and is being tested by Citigroup internally. In the second phase, the companies will refine and expand the technology to include other services, and Young says Citigroup expects to begin marketing it to cable operators worldwide within 12 months. The company also signed a deal with startup WorldGate Communications Inc., a provider of Internet TV over cable service. Citigroup will be the exclusive financial-services provider for WorldGate's Internet/TV platform.
At least one analyst is not impressed with the cell phone/TV initiatives. "They're nice extras but not primary vehicles," says Forrester Research's Doyle. "I don't see people doing banking or paying bills in an emergency where they need to use a cell phone. And TV is a public thing, whereas the PC is more personal." Still, e-Citi takes the efforts seriously. "We've set up a platform through which we can compete more effectively in the 21st century," Grotstein says.
Citigroup is also taking seriously the need to support the potential explosive growth in customers. Williams says customer-service centers will be significantly enhanced, including the addition of automated call-routing technology, systems that give operators instant on-screen access to customer information, and multimedia systems that combine fax, E-mail, and video.
Despite the growing importance of e-Citi to Citigroup's business, Horowitz makes a point of saying the company isn't abandoning brick-and-mortar banking. In fact, many of its new customers will likely rely totally on more traditional banking. "We're not shutting down branches," he says. Horowitz is pushing for development of a strong distribution channel beyond Citigroup's traditional five-state service area in the United States. "We view the physical distribution organization as vital and as fundamentally necessary for us to be a full-service provider to corporate or consumer customers," he says.
But e-Citi represents a significant competitive edge for Citigroup if the company gives e-Citi free reign to develop new E-commerce opportunities, says analyst Musto of Gomez Advisors. That's because others have kept Web efforts closer to traditional banking operations. "If they've given [e-Citi] resources like branding and money, they have a shot at building an Internet business without disrupting the profitable business they already have today," Musto says.
And e-Citi represents Citigroup's best chance at the dramatic growth symbolized by the billion-customer figure. "All these initiatives are extensions of what we do today physically," Horowitz says. "But with them we can extend into new communities and reach new consumers around the world without having to build a lot of new banks."
How many banks would it take to support a billion customers? By exploiting the Web, Citigroup hopes it won't have to solve that problem.
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