Mobilizing Citibank: Lessons Learned

Recently, Citibank provided some perspective on their mobile strategy and their renewed focus on a better delivery of “traditional” customer service.

In the ever evolving landscape of mobile technology providers, Saucalito, CA based mFoundry received a vote of confidence for its ability to develop mobile client applications. One might think Firethorn and Obopay were not so lucky and jump wrongly to conclusions (especially when considering the recognition of Obopay by the World Economic Forum). Yet, this week was really not so different for many others in the land of the startup with its ups and downs.

So, why should we take notice? Because, in spite of its recent woes, Citibank kept alive a program of investments in innovation initiatives, at a time when most of their competitors seems to forget the very notion. The changes at Citibank highlight the struggles of building “mobile money.” There are several lessons to draw from Citibank’s announcements.

First, just as with web-banking a decade ago, integrating mobile into a bank channel strategy is a tale of trials and tribulations. As MaryLou Dowd pointed out in her interview with the American Banker, “Mobile banking is not a direct duplicate of online banking. A customer on the go has different needs than a customer sitting in front of the browser.” Any Silicon Valley venture capitalist would have been happy to share this insight several years ago, since it fueled countless investments in local companies. Little though would it have mattered, as it takes experiencing the difference in order to appreciate it. Hence the importance of trying and investing in various options as Citibank did and too few financial institutions seem to understand.

Second, it is hard to remain committed to innovation when your core business is under deep restructuring. In the recent months Citi is reported to have focused on consolidation, including merging its internet and mobile groups. In parallel, Steve Kietz, the Citi representative at the helm of Mobile Money Ventures, has left the company. It doesn’t require a lot of imagination to picture the turf battles and internal fights that occurred in the process, all of which are text book ways to undermine innovation. Let’s hope that Citibank, the giant too big to fail, is not joining the masses of companies too big to innovate.

Third, Citibank’s decision does underline a trend I have observed in mobile financial applications: unlike what was thought when Firethorn offered its Telco centric wallet, mobile money will not emerge on its own, but will be part of re-engineering commerce and banking. Mobile money is not about a new form of “old vs. new economy,” but the expression of a channel to acquire, service and retain clients in existing markets with existing back-office functions in new ways. The case of USAA taking check deposits directly at the iPhone thanks to check imaging is exemplary in that regards. I am expecting in the coming months announcements from similarly forward thinking merchants.

This brings us back to Citibank and its goal of servicing better its clients. The real test of their strategy will lie with their ability to aggregate the multiple aisles of the “financial supermarket” into store fronts that matters to their target clients. We are barely in the first inning of the mobile money game. Let’s hope that beyond alerts and mini-statements, Citi will continue to recognize the importance of experimenting to build a mobile experience relevant to the mobile generation; unless of course it aspires to be the bank of the Sandy Weil generation.

Agree / Disagree : Contact me at patrick.r.gauthier@sbcglobal.net or twitter: prgauthier.

Patrick Gauthier is a senior payment industry executive with 20 years of experience in developing, selling and deploying new technologies for payment and commerce, on a international basis, in private and public companies ranging from start-ups to global organizations.