Citi – Bank of the Future?

Even by Citi standards it is very strange to have 2 people with no retail bank experience driving a retail bank strategy. Liza came from the card group under David Simon in Customer Experience. Liza took over from one of Citi’s best internet leaders Rob Rosenblatt (now at Chase Cards).

September 2009

Travelocity CEO Michelle Peluso was hired by Teri Dial to run “Citi Forward”, with Liza Landsman running the mobile and internet team…

http://www.bloomberg.com/apps/news?pid=20601109&sid=alIEXQt0mqFQ

Citi has proven the ability to get deposits as Citi’s US Direct Bank under Direct CEO Steve Kietz was the fastest growing bank (not just online bank) in the history of the US, collecting over $8B in 6 months. Steve’s marketing genius was not enough to overcome the lack of investment. The fact remains that building a deposit book requires investment, (a 20 month payback at best).  You either build a book or milk it.. (take a look at the balance run off in CitiDirect since the dropped the rate from 2.75%.. )
http://seekingalpha.com/article/18843-citigroup-q3-2006-earnings-call-transcript.

Even by Citi standards it is very strange to have 2 people with no retail bank experience driving a retail bank strategy. Liza came from the card group under David Simon in Customer Experience. Liza took over from one of Citi’s best internet leaders Rob Rosenblatt (now at Chase Cards).

Issue for “bank of the future” is not collecting deposits.. it’s determining how you acquire and retain customers separate from a rate driven product play. The key “Strategy nut to crack” is how to build a profitable retail bank business in the US without branches. Chase, Wells and BAC have all done extensive studies that show customers select a bank based upon the proximity of the nearest branch to home/office.

Internationally, employee direct deposit (aka salary domiciliation) has been the most effective way to gain deposit customers with a minimal branch footprint.

Citi senior management continues to fuel the churn of executives here… lessons are learned and relearned in each new management appointment and each country. Understand that Michelle has very little appetite for the job…. perhaps she’ll gain perspective after her 4 month leave starts next month.

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