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While Citibank has long been considered a leader in retail banking, much of their muscle has been provided by their huge US credit card business. With credit card growth at anemic levels, Citibank’s new North American management team is looking towards a more conventional strategy to grow their retail banking business. Citibank is executing a multi-year, multi-billion dollar strategy that calls for a new technology platform and expanded delivery channels. Expanding their retail banking branch network is key to that strategy.
Citibank’s current branch network is concentrated in New York City and a few other major cities including San Francisco, Los Angeles, Miami, and Chicago. The network has only 1,023 branches, compared to the 5,227 branches owned by Chase – their cross town and national rival. With 4%national deposit market share, Citibank would need to double its branch network to equal the branch to deposit ratio of the other top national banks.
While some question the future of the branch, Brad Dinsmore (group executive vice president and head of retail banking, North American Retail Banking for Citibank) believes that branches play an important role. According to Dinsmore:
The number of touch points for customers is going up dramatically. They still are coming into branches – not as frequently perhaps, although we’re seeing our teller transactions stay relatively constant. At the same time, they are using ATMs, online, mobile and telephone banking much more frequently than they had in the past. So, the implications are that we have to understand customer needs and how they’re changing and be ready to improve service in all our different channels.
Back in December, we opened a flagship branch at Union Square in New York, which is an example of responding to changing customer needs. This branch has far less paper than a typical branch might have. It has interactive sales walls and 24/7 access from the ATM lobby to live customer service experts via video assist. We have to be ready with different channels so that we can respond to customers and clients based on how they want to be served.
Many of the branches that we’ll build going forward will be smaller in size. They will leverage more technology and the staff at those branches will be trained to handle a variety of different things. In other words, in your traditional branch you have tellers and you have bankers. In the branch of the future, in some of these smaller locations, you will have staff that can do a variety of different tasks and respond to the customer’s specific needs.
For more details on this interview in Banking Strategies:
To read about Citibank’s latest prototype branch in New York, read this related article in Bank Systems & Technology: http://www.banktech.com/channels/228800795