Posted on

Inside Citi’s nostalgia marketing strategy

Citi is trying to win over customers by making a push into music.

Its latest ad campaign, which began airing this week, includes three 30-second television commercials written to make customers feel all the feels. They’re all set to universally recognizable songs, no matter how old you are. One commercial features a little girl playing in a sprinkler with “Singin’ in the Rain” by Gene Kelly playing in the background; another, set to “Into the Mystic” by Van Morrison, features a group of young adults laughing on a beach boardwalk at sunset; the other portrays an older man joyriding a shopping cart to “Here Comes Your Man” by the Pixies.

It was Citi’s intention to mix up the ages of the people portrayed in these images, said Jennifer Breithaup, chief marketing officer of Citi’s global consumer bank during a fireside chat at this year’s Advertising Week in New York — as well as the music selection.

Each of the commercials ends with the slogan: “What if a bank could help you feel a little more of this?”

“Think about the soundtrack of your life… [it] creates an enormous amount of potential from the brand standpoint when you think about commercials and experiences like we had this weekend,” Breithaup said, referencing the Global Citizen Festival, the music festival founded as part of a movement to end extreme poverty, which takes place in New York and of which Citi is a partner.

Music is “part of Citi’s DNA,” Breithaupt said. Citi has built a ticketing platform, effectively, called Citi Private Pass, where customers can access 1,300 Citi-sponsored music, sports and theatre events in the U.S. It also has a longstanding partnership with NBC and the Today Show where it present a concert series on Today — and is moving to testing virtuality live streaming of those events.

“Allowing ourselves the permission to be an experiential brand and not just about the banking and the financial services we offer — what else does our brand unlock for consumers? Entertainment access … makes us look more human. If we can be part of those memories, that’s something you want your brand attached to.”

Citi is far from the first brand to use nostalgia in its marketing efforts but it’s a significant approach for a bank. Marketing financial services in the digital age has largely been about new online and mobile channels, finding ways to connect with customers and potential customers in those places and using people’s data if possible to tailor what financial products banks can potentially push them.

“Millennials are coming of age in an age of economic turmoil — a difficult job market,” Cassandra Mcintosh, senior insights analyst at Exponential, told Digiday. “They end up romanticizing simpler times much more – even those times they weren’t around for.”

That’s more true now than ever in the U.S., which is so politically divided that everyone — particularly millennials — wants to do business with a brand they identify with or whose value appear to align with theirs.

However, Citi is often ahead of the curve when it comes to keeping up with innovation. At the beginning of the digital shift it consolidated more branches than its peers and upgraded remaining ones to smaller and more digitally oriented ones first; it was the first bank to build an entirely mobile-first banking experience, for a certain set of clients, and get it to market quickly; and it’s one of a handful of banks that has made its application programming interfaces available to third parties to use.

But for many financial brands, technology isn’t just making interfaces prettier and faster. It’s turning banks into the “dumb pipes” of banking as institutions become the platform through which other financial applications operate, which means banks’ marketing armies need to, as Breithaupt told Tearsheet earlier this year, join the front lines of banking (which historically are in the hands of branch tellers.

So now, Citi is “leaning in a little harder on our advertising,” Breithaupt said. It has long used music and live music events to differentiate its brand from its industry peers. Now it wants to show customers it can connect with them in their everyday lives — not just when they need help with their money.

“Music has that emotive power,” Breithaupt said. “It is the universal language and allows a brand like Citi to reach and connect and reach a broad range of consumers regardless of where they are in the world, what life stage they’re in. Music has been an important tool to bring us that emotion we’re looking for.”

Posted on

‘Design is a competitive advantage’: How three banks are integrating design into customer experience

Despite all the hype around transformative technologies or the fact that consumers aren’t actually using any “fintech,” the dinosaurs of the financial world are changing from the inside out, putting the customer experience before their business — and design thinking is at the forefront of that.

It’s optimistic, but also just a new way (for banks) of doing business. They’ve realized they no longer dictate how they do business and what they produce; their customers do. In a digital world filled with choice, banks’ customers need choice, empathy and ease of use designed into every interaction they have with the bank — and they need to deliver on that quickly, before their competitors, which now include retailers and other non-banks.

Design thinking is moving bank operations away from “managing” and more toward innovating. For example, banks co-create products with customers in order to integrate their feedback more quickly and more frequently, instead of some far off time when a product s due for an upgrade. They’re deliberately hiring teams with diverse backgrounds to reflect the diverse customers they serve and build solutions with empathy, instead building teams of people with similar backgrounds and strengths. When they build new products, they’re collaborating with other parts of the organization and even with other financial services providers, instead of working independently in silos that don’t communicate with each other, which drags the delivery process at every stage.

“There is no greater trojan horse to change an organization than design thinking,” said Stephen Gates, head of Citi Design. “Especially with something where there are lawyers, regulators… Part of what we had to do was change thinking, not behavior. If it’s new behavior on old thinking, we didn’t really change anything.”

Here are three banks going all in on their design people — finding experts, training non-experts, cultivating internal communities — to make their organizations and customer interactions stronger.

BBVA
Spanish banking giant BBVA is training 1,000 staff ‘ambassadors’ to spread good design practice throughout the organization, Rob Brown, head of marketing, design and responsible business at BBVA, said Thursday at Experience Fighters.

Brown, who BBVA poached from Barclays last year, said the most innovative and exciting products on the market are those created at places that incorporate design in every part of the organization, not just the creative department.

“These companies understand that design is a competitive advantage and that all employees, regardless of their role, should begin to see themselves as a designer that contributes to improving the customer experience,” he said.

BBVA currently has 150 designers in 11 countries, but as part of the design ambassador pilot it will train “up to” 1,000 more from various parts of the organization, by promoting design thinking courses and providing training for the “non-designers” to apply design thinking to their day-to-day work.

“My goal is that our more than 900 projects around the world be undertaken using Design Thinking, and that our professionals have fun doing so,” he said.

USAA
In February USAA unveiled its 120-person design studio in Austin to focus on improving digital experiences among customers and employees.

The bank, historically a leader in financial services innovation — it was one of the first banks to get into mobile check deposit and online banking, for example — sees people and internal culture as the essence of how it design translates to their customers. So it chose Austin, a tech hotbed, for its design community, versus its home base in sleepy San Antonio.

Their goal, like all banks today, is to make financial planning, applying for a mortgage or choosing insurance coverage as easy calling an Uber or one-click buying off Amazon. But the reality of user experience design is often, businesses don’t experience the brand the way customers do and as a result, the work falls short.

“You have to do detailed visibility testing but also understand emotions that bring someone to an experience,” Meriah Garrett, the bank’s chief design officer, told Tearsheet at the time. “If it’s an in-and-out transaction, like trying to make sure you get your bill pay right, it’s all about speed and clarity.”

Appropriateness is the key design principle, she said. “It comes down to how you apply things appropriately… That drives me to why we have to have really good people.”

Citi
In October 2015, Citi launched its FinTech unit to act as a startup inside a bank dedicated to mobile-first solutions for its consumer banking customers. A month before that, Citi’s Gates joined the bank as part of the then 40-person Citi FinTech unit, to lead its in-house design studios as well as external agencies. His team has designed the user experiences for Citi.com’s various updates, the Citi mobile app and worked on the branding and advertising for Citi FinTech, the Citi Innovation Labs and the Citi Global Consumer Bank.

A deal signed that with the design consultant Ideo, in which it would train Citi employees on design thinking, has been a tremendous force in Citi’s innovation strategy, Gates said in January at the Design+Finance conference. The two have been working together to create a version of design thinking with agile methods for innovation that’s unique to Citi. Gates said he hopes his team would take the lead on spreading innovation across Citi.

“[Design thinking] gives everyone permission to come into that process, to participate. So instead of me going to legal and saying ‘will you approve this, yes or no?’ Come be part of the process. And then I can tap into the base thing: people will psychologically support what they’re part of. That was a massive transformation… ‘Creative’ isn’t a department anymore.”

Since then, the demand for the design teams’ work has grown to be the fastest growing team in the consumer bank, he says. He began the transformation by evaluating existing in-house creative talent and then re-establishing standards, culture and structures for the team. He has since hired new leadership and talent and coaches existing talent across different studios.

Posted on

‘Friend or foe’: What banks have learned from working with fintech

Three years ago fintech startups thought they were coming to eat banks’ lunch, but today the two are frenemies that acknowledge each side needs the other to stay in business.

Silicon Valley gave Wall Street a brief ego trip by bringing new technologies like blockchain and machine learning that could “revolutionize” the banks. But even though banks are more open to cross-sector collaboration, they still maintain that they understand the business of finance better than anyone.

“The narrative has changed but it does creep back every once in a while,” said Mary Harman, a payments strategy executive at Bank of America, at the Swift Business Forum in New York Wednesday. “We whipsaw on whether fintech is friend or foe… we’re distracted by legacy issues and regulatory compliance issues.”

Now that banks are catching up on the technology side, they’re learning that technology isn’t the problem to be solved, commercialization is. “We don’t innovate for the sake of innovation” has become their mantra as they’ve learned they can’t get swept away by the mere idea of innovation, they’ve gotta stay focused the business.

Here are three things the industry has learned from that process.

When not to innovate
Sometimes banks have to trade agility for standardization, sometimes it goes the other way around.

Banks can innovate fastest if they do so alone, but if they don’t have clients or customers to actually transact with, the innovation becomes pointless. That’s why involving a network of other industry players is so crucial — but getting many different entities to agree on many different things is bound to slow down all organizations involved.

“[Consensus] becomes the interest of the individual versus the greater good, and how we manage that drags the process along. It takes time and effort to get through legacy,” said Michael Bellacosa, global head of payments and treasury services at BNY Mellon.

Plus, it’s usually more important for institutions to keep the lights on and bump innovation down on the list of priorities.

“There are a lot of legacy services that make organizations a lot of money,” said Sean Rodriguez, faster payments lead at the Federal Reserve Bank of Chicago. “They’re well known, well run and profitable. If you look at them and say you’re gonna change all that, you have to think: how fast do I really want to do that?”

Approach startups as vendors, not partners
It takes long enough to bring a handful of banks to consensus. Technology startups in financial services now exist to speed up various processes, but adding in more participants can be distracting too. Banks need to focus on providing a business solution to a client or customer, and not on the hierarchy of relationships as institutions try to maintain the status quo.

“‘Is fintech a threat to banking’ is a very narrow part of a much wider discussion,” said Mark McNulty, global clearing and financial institution payments head at Citi. “Sometimes there’s way too much focus on the threat. This is just about partnership opportunities, about leveraging a vendor.”

By approaching startups as vendors instead of “partners,” one financial firm could even find a partner in another. For example, Citi recently launched a partnership with Nasdaq, that links the bank’s business payments services to Nasdaq’s blockchain platform — all made possible by Nasdaq’s use of blockchain startup Chain’s distributed ledger technology.

“This is an opportunity where fintech being deployed in another realm of the industry for settling another type of transaction still needs payments first,” McNulty said.

Don’t be a know-it-all
Financial organizations have to break themselves out of the silos they’re so used to working in, in order to evolve and become more nimble, which is essential in an environment where the technology underpinning the business develops so quickly.

For BNY Mellon, that kind of thinking began in its innovation centers, where it has been able to take its business development, operations and technology employees, put them together with third parties and push client problems to see what it could solve.

“When you’re embedded in the same things everyday, you don’t think of it the same way and usually don’t get that fresh outside look that allows you to be a little bit more nimble,” said Bellacosa. “I get very different perspectives and you can usually get to a solution you never would’ve thought you’d get if you didn’t attack it that way.”

Although, bankers have to be wary of catching “bright shiny object syndrome.”

“It has been a problem for a while across our industry,” said Citi’s McNulty. “It takes a lot of discipline to really focus on problems as opposed to technology.”

Posted on

Retailpocalypse: Bank branches are closing in droves

There may be no physical institution as historically revered as a bank. Community centers and trusted destinations, the banks of our imaginations are cool and quiet spaces housed inside classical limestone buildings. Ceilings are high, floors are marble; words echo. Behind bronze-framed windows, tellers take money from trusting customers for safekeeping or direct them to comfortable chairs where they wait for a personal banker.

Nice try. Banks these days are hardly elegant or imposing. Most have shrunk in size thanks to rising costs of real estate, and many have disappeared entirely, according to data from the Federal Deposit Insurance Corporation. Chase reduced its branch presence by 190 locations, a 3.4 percent decline, from 2012 to 2016. Wells Fargo closed 98 branches, a 1.6 percent decline in the same period. Its peers are even more aggressive. Bank of America closed 243 branches (16 percent) in that period and Citi closed 302 (28.5 percent).

Branches are consolidating locations with lower servicing volume, opening in higher growth areas and renovating existing branches and ATMs. More importantly, they’re evolving into more compact, digitally oriented spaces that incorporate new technology and help branch employees focus on improving the customer experience.

Some end up looking more like Apple Genius Bars than banks.

Citibank’s new digital branches, for example, each feature a workbench with computers where customers can look at their finances with a personal banker at their side. Staffers, equipped with iPads, are available on the floor. While the teller behind the window used to be the standard, it is now seen as an inconvenience. This so-called “banking side-by-side,” however, is thought to be a luxury, and banks like Citi want to make it the norm.

“We have personal bankers here, a manager, head tellers – we have everything a traditional branch has but we’re serving [customers] in a more convenient way, and in a better way, really,” says Solymar Difo, head teller at a Citi digital branch in Miami. “Behind the teller line, there wasn’t much we could do. … You might tell them they have to wait for a personal banker, but then the personal banker is caught up opening accounts or doing other things that this client here in front of you doesn’t have time to wait for.”

Traditionally, the role of a branch teller has been a demanding one for such an entry level, frontline job. Many tellers are often straight out of college. They have to learn about the many different financial products they sell, when to identify a sales opportunity that would require a personal banker and how to quickly sell the idea to a customer to get them to that banker.

In digital branches, however, “there’s not a barrier between you and the client,” Difo says. “Instead of directing them to see a personal banker or make a call [or] go online … I have the opportunity to do all three [myself]. I can educate them, help them online, I can even make the phone call with them.”

While those in the banking industry feel there will always be brick-and-mortar branches, in large part because the business of banking is grounded in trust, and in knowing the person with whom you’re working, the move to digital technologies is expected to grow exponentially.

“Today, four out of every five monetary transactions are completed through our self-service channels, but we still see meaningful opportunities for improvement,” Thasunda Duckett, JPMorgan Chase’s consumer banking CEO, said at the company’s Investor Day in February. “Last year, we had over 400 million transactions being completed through our tellers, 70 percent of which could have been done through our self-service channel. So in the year ahead, you’re going to continue to see us focus on migrating more of these transactions to digital.”

Posted on

What banks can learn from Amazon

No one knows if Amazon will be buying a bank anytime soon, but more and more, it’s becoming a shining example of how banks themselves should be running their businesses.

Banks have embraced the idea that their own customers want new products delivered by new financial startups — the savings and management apps, authentication and security tools and money movement capabilities — but to truly put the customer experience first (as so many say they do) they should show the customers they’re here to give them what they want. That means instead of collaborating with young startups on building technology, they should make themselves a distribution channel with different financial products — just like Amazon does.

“Amazon opens its platform to hundreds if not thousands of providers of goods and services and makes it available to millions of consumers — they don’t care what you buy or from who as long as you buy it from the Amazon platform,” said Ron Shevlin, director of research at Cornerstone Advisors. “Amazon does have products to sell,” like the Fire TV or the Kindle. “They don’t care if you buy them because they still sell the iPad and everything else.”

It’s probably a little out there for banks. But more and more, changing customer expectations and an increasingly digital world are forcing banks to accept the idea of open banking platforms. But they should also bring that thinking to their actual business model.

Why a platform?
Banks today don’t care where customers buy their products, as long as they buy their products. But considering how many millions of customers they have, they don’t have that many products and services to sell to them — loans, credit cards, accounts.

In a banking context, a successful platform would be one that attracts and matches both producers and consumers. It would give people choice without friction — duplicate data entry, integration, having to paying multiple providers — create new revenue streams for banks and offer opportunities for fintech startups to scale, by reducing acquisition costs through platform participation, according to Shevlin’s report, The Platformification of Banking.

“The platform as a business model is designed to address that problem of enabling a bank to provide products and services without having to go into different partnerships and one-to-one integrations,” Shevlin said. “If you want to sell your stuff on Amazon, you sign up and you’re in. It’s easy to plug into Amazon, and that’s the concept missing in banking.”

Banks that exist today are one sided, they attract consumers and they’re the only provider of services to their customer. When it offers customers a choice of products and services, they’re bank-selected products and services. Fintech companies have trouble reaching consumers and banks have the challenge that they have this base of consumers but aren’t able to provide them with a large base of products and services.

Banks as platforms
If banks are becoming platforms, these are the earliest days of that shift. APIs are nothing new — they’ve been around for decades — but in the last year alone, Citibank, BBVA, Capital One and probably others have made their APIs open to developers in an effort to innovative better and faster.

They should also open additional revenue stream by monetizing offerings that run on those platforms. For example, a payments API that makes it easier for a retailer to do payments with a bank should inevitably bring in more payments. The bank takes a cut, everyone wins. But to be truly customer-first, the platform model shouldn’t stop at technology; banks should move their consumer-facing business to a platform model too, Shevlin said.

“All these API stores are pretty much technology-driven efforts without a lot of thought to how the business model changes,” Shevlin said. “How do we provide an interface to the consumer that shows there’s a choice? The banks aren’t necessarily adopting this or embracing the concept.”

There are some moves. In November, Citi launched its API Developer Hub. Mastercard, Virgin Money and others are already using Citi APIs to create customer solutions.

If banks today are going to stay relevant in an increasingly digital world, their only choice is to become more open. Until now, banks traditionally have been closed off, not wanting to share their secrets of the trade. It’s been an enormous cultural shift for them. Now they’re becoming more open, but it’s important to recognize there’s a fine line between providing open banking as a service and merely outsourcing innovation, said Carey Kolaja, global head of product at Citi FinTech.

“Our move to a developer hub and an open banking strategy is by no means a reflection that we’re outsourcing innovation or that banks will become the dumb pipes on which a transaction sits and not add value to our customers,” Kolaja said. “That being the case, we have to be realistic around why banks, including Citi, need to embrace new strategies with some of the fintech disruptors out there.”

It might seem we’re entering a world where banks become the platforms that fintech startups plug into so customers can use those services more easily, more securely and with more trust — Digit and Qapital for savings, Acorns and Robinhood for investments, maybe a credit monitoring app like Credit Karma or NerdWallet, and of course, the Venmo, Square Cash and other payments services.

Each of these apps uses APIs to plug into banks, that’s what allows users to interface with their bank account and register those details in order to open accounts with these various apps. It’s fun for now, the experimentation phase, but it’s not sustainable, Kolaja said.

“I don’t necessarily believe that in the next five to 10 years we’ll end up in a place where consumers want fragmented financial lives across multiple apps, nor do I believe some of these fintech disruptors will be able to sustain their existence from a financial and capital perspective without broadening their reach into other categories,” she said. “There’s a convergence that’s already starting to happen.”

Banks can only innovate so much
Customers don’t care about that distinction between open banking and outsourcing innovation. They just want what they need and for that service to come as easily and affordably as possible. That banks are becoming more open with each other on a technology level doesn’t mean they’ll apply the same thinking to their business model. Considering the size of their business, the existing organizational structure and the fact that they are making money, it is highly unlikely a bank will adopt this business model.

“When you look at what has prohibited big institutions from being successful — besides process and not being willing to take risks versus being able to take risks – solving for a simple customer experience with minimal friction has been problematic,” Kolaja said.

The more likely scenario is that a tech giant, like Amazon or Alipay, will enter the arena to sell consumers financial services, and existing banks will compete with those platforms, Shevlin said.

“The large bank is simply not going to become a platform,” he said. “They’ll go through all their technology exercises by opening APIs, but they’re not opening up, they’re not selling additional products or services or creating an environment.”

A bank could theoretically offer its own services and be its own banking platform, said Tom Eck, IBM’s chief technology officer for industry platforms. For example, if it were a Chase banking platform, it would expose Chase services and could open all up as APIs, making it easy for developers to consume those APIs on a Chase-specific platform.

IBM has a similar vision for an Amazon-like marketplace. It’s not consumer facing, but it’s a cloud based platform for financial services on which app developers and data scientist can come and build apps. Eck described it as a one stop shop ecosystem that includes fintechs startups, banks and insurance companies.

“A bank could both be a seller of services while it’s also consuming services from some third-party fintech. In addition to IBMs own assets, we’re focused on attracting fintechs, banks credit card processors… You come to ours because you know you can come and access all these insititutions. You see the catalog, can subscribe to these services in one place and then we make it easy for you to build on our platform consuming those APIs.”

It’ll be a significant additional revenue stream when it starts to monetize offerings that run on that platform — effectively a marketplace fee. It will also bring value to the platform itself.

“There’s an economic incentive for the platform operator because it typically extracts the seed for the use of services. IBM is a great new marketing and distribution channel for them, and it takes very little work to get them into the marketplace.”

Posted on

How banks are using virtual reality

Virtual reality has emerged as a hot topic in banking with the rise of artificial intelligence, innovation labs, and the death of the physical bank branch. There’s a way to tap into the mind of the customer through VR, but how it should fit into the business is still a mystery for most.

Venture capital funding in VR totaled $2 billion from 2015-2016, according to Digi-Capital and revenue from VR is expected to hit $162 billion or more by 2020 from $5.2 billion in 2016, according to IDC Research.

It’s still early for banks interested in bringing VR into their business. And like any new technology, VR is going to face some opposition before it’s more widely adopted across financial services. Just because banks can use it, doesn’t mean they should use it everywhere, or at all. Banks are experimenting with how to use it, when it’s appropriate, and who their partners will be. One thing is for certain, though: if customers like it, banks will want it.

“Banking customers have rarely seen a channel or a way to interact with a bank that they didn’t like,” said Raja Bose, global retail banking consulting leader at Genpact. “Branches, contact centers, online, mobile; banks are now letting customers interact with them via social media. The more ways you get consumers to touch their banks the better and there are always going to be some consumers that like it and want to do it.”

However, some banks have dabbled in the technology already. Below are examples of three banks’ brushes with VR.

BNP Paribas
On Tuesday, the French banking giant BNP Paribas introduced a VR-based app for retail banking that allows users to virtually access their account activity and transaction records.

The experiment is perhaps the first to actually touch the financial services parts of banking, unlike the marketing approach banks like Citi and Wells Fargo below use to cultivate their brands.

“Banking concepts and savings and saving for retirement — all this stuff is often very intangible,” Bose said. “You’re not buying anything, you’re not walking out of a branch holding something. To some extent VR becomes a way of helping customers get a little more tangibility. Virtualizing is a good tool for visualizing data. If you can come up with a way of showing how the $100 you save today turns into a big pile of money in 20 years it might make it easier for people to grasp the concept.”

The bank’s real estate arm also partnered with French startup Vectuel & RF Studio to develop “the POD,” a teleportation “capsule” that allows people to step inside and view new apartments and buildings under construction or for sale in three dimensions and in 360 degrees, and move through the journey of a real estate purchase.

BNP did not respond to requests for comment by deadline.

Citi
Citi has a partnership with Live Nation and NextVR to produce a series of live virtual reality concerts as part of its “Backstage with Citi” initiative, which rewards its cardmembers with such events. In this case, fans are transported with VR headsets to live shows and “backstage experiences” with some of the most popular artists.

It also has a longstanding partnership with NBC and the Today Show where it presents a concert series and did the first ever VR concert livestream on the Today Show.

“We took requests from consumers and had 30,000 requests for VR headsets,” Citi’s chief marketing officer, Jennifer Breithaupt, recently told Tearsheet. “We gave those away and people were able to experience that show live from Rockefeller Plaza but also experience it from home as if they were there.”

Wells Fargo
Developers at Wells Fargo Digital Labs are working on integrating VR into next-generation financial services. Digital Labs, a 1,700-square-foot facility in San Francisco with virtual reality headsets, high-definition touch screens and video conferencing, was founded almost 10 years ago as an online-only “space” to showcase and demo new technologies for customers, executives and other employees.

Last year, Wells also went on a “Together Experience Mobile Tour,” which hits music festivals, sporting events, pride festivals and other cultural events nationwide. Along the tour the bank allows people to experience memorable and engaging activities, like “Treasure Quest,” a virtual reality challenge that takes users through the brand history of Wells Fargo, beginning in the 1860s. Users are greeted by a virtual banker at the start of their journey and then challenged to Gold Rush-era activities like gold panning. Users are directed to Wells Fargo ATMs throughout the quest and need to complete their challenge to return to modern day.

Posted on

Inside the creation of Citi’s blockchain payments platform

Speed before scale is the name of the blockchain game for Citi.

On Monday, the bank unveiled an agreement with Nasdaq that allows it to actually put money on blockchain technology by linking its business payments services to Nasdaq’s blockchain platform, which is used for buying and selling shares of private companies, among other things. It’s not a proof of concept or an announcement of an upcoming announcement. It’s ready now for “real world” use, according to Morgan McKenney, Asia Pacific head of core cash management, at Citi’s treasury and trade solutions arm.

The technology integration means there can be a direct exchange of funds between Nasdaq and Citi — when someone purchases a share, for example — without the time consuming in-between messaging normally involved. Today when people try to move money, they do so through messaging platforms that need to be verified and reconciled so funds can be released. This partnership merges the ledger that shows moving shares and the one that shows moving money — and removes the need for a reconciliation process.

It’s significant to witness a blockchain solution in the wild. The more common strategy is to build large networks of technology contributors and co-creators of applications for the technology; those groups hardly have completed work to show. The idea behind the Citi-Nasdaq partnership, using Chain’s technology, was to create a “minimal viable ecosystem,” of just a few trusted partners — to be able to get a product to market faster, and focus on scaling the network later.

“Everyone is used to a minimum viable product, how do you extend that thinking to something thats going to involve multiple players?” said McKenney.

To have impact, blockchain technology needs a network effect — the more people use it, the more value it has. But building a network before executing a product or service can slow a group down, and the bigger the group, the easier it is to get caught up in ideas without much execution. One of the things that “helped translate the theoretical thinking to actual application” was considering the project’s “feasibility,” McKenney said.

“Could we launch this thing within a year? We did not want to be in this space where blockchain was too new,” to use in the foreseeable future, McKenney said. “Citi didn’t build a true killer app… it solved a true customer painpoint.”

It helped that Citi, Nasdaq and Chain have a previous working relationship and “didn’t start from scratch,” McKenney said. Citi and Nasdaq are using the fourth iteration of Chain’s Open Standard protocol. At this time last year, Chain unveiled the first version, which it built with Citi and Nasdaq as well as Capital One, Fidelity, First Data, Fiserv, Mitsubishi UFJ Financial Group, State Street and Visa.

Citi is involved in many collaborative efforts: R3 CEV, the 43-member bank consortium focused on building a distributed ledger for financial agreements; Hyperledger, a cross-industry collaborative effort to create a fabric layer with blockchain technology on which members can build other applications; and the Enterprise Ethereum Alliance, the privacy-oriented group developing solutions with open-source ethereum.

McKenney’s remarks about a minimal viable ecosystem highlight a growing conversation in the blockchain space and in fintech more broadly: that startups and legacy firms often refer to younger technology firms as “partners” instead of “vendors.” It’s difficult to be a vendor of new technology for financial services because no legacy institution wants to be tied to a single provider.

“We really have forged the new innovation model,” McKenney said. “This was created for Nasdaq with Nasdaq. The concept of co-innovation, or co-creation, is relatively new. Banks are still relatively early in that space.”

Posted on

Citi CMO Jennifer Breithaupt: Marketing is joining the front lines of banking

When it comes to legacy banks, Citi has been one of the front-runners in tackling new technologies.

It was one of the first to transform its branches to “smart branches,” offer a mobile-first banking experience for high net worth clients, and has been a mobile banking innovator, introducing functions like charge disputes, and card replacement tracking in the app. It now claims to have online users that exceed the population of Mexico City and more mobile users than the population of Hong Kong. (It declined to give specifics, but the population of Mexico City exceeds 8 million, while  upwards of 7 million people live in Hong Kong.)

As technology has changed consumer expectations, and perhaps lowered their attention spans, banks are having to meet their customers in different channels. That means the onus isn’t just on bank tellers anymore to create deep personal connections with customers, marketing is working hard to do that in the branch, on the website, in the mobile app, on social media and everywhere else the customer spends time.

Tearsheet caught up with Jennifer Breithaupt, Citi’s recently appointed global consumer marketing chief. She joined the bank in 1999 and has held a number of key senior positions, driving engagement and long-term brand loyalty with its customers. She spoke to Tearsheet about creating customer connections, collaborating with other parts of the bank and her personal goals moving into a new role.

How do you measure a campaign’s success?
Awareness and preference are key indicators for us as it pertains to the more traditional marketing channels. Website traffic and natural search, people looking for and searching our products is important for us because it leads to card acquisition. All this work were doing above the line is leading folks to want our products and services. So we do track card applications and we’re also looking at if they’re increasing their engagement with us and, are our products “top of wallet.”

How has technology changed how you work, where you meet your customers?
It’s being on the front lines with consumers really. They expect to seamlessly interact and self serve — that means the ability to not visit a bank branch or store front, or not make a phone call. It’s important for us to think not just about “mobile and” but mobile in general because that’s where customers are.

What’s something you’re testing collaboratively that your team gets to lead?
Virtual reality. The rise of VR is really starting to take hold and how we test in VR is an important place for us to be. By 2025 the market could reach about $692 billion. It’s early days with VR. Down the road, could VR be part of what our consumers experience in a bank branch or other places? Certainly.

How do you test that for engagement?
We have a longstanding partnership with NBC and the Today Show where we present a concert series on Today. We did the first ever VR concert livestream on the Today Show with one of the bands. We took requests from consumers and had 30,000 requests for VR headsets. We gave those away and people were able to experience that show live from Rockefeller Plaza but also experience it from home as if they were there. That was one of our first forays into VR.

What’s a goal of yours as you assume this new role?
To create a shared voice for a consumer business globally. We do quite a few things at Citi to talk about our products and services individually, but haven’t had the time or ability to create this consumer brand platform that we have in the works right now. To create an overarching halo brand voice and positioning is really exciting.

Posted on

How Citi’s latest cybersecurity bet veers from the usual model

Financial technology trends come and go but three are here to stay: Everyone has a mobile phone, large businesses are moving their data to cloud systems — and threats to cybersecurity are evolving with and around both behaviors.

As the threat cybersecurity poses for financial services – or any company, since they’re all collecting customer data – isn’t going away, these companies are heavily invested in analytics firms that monitor breaches, defenses and other activity to try to make sense of user behavior and identify patterns to help prepare for the next attack. That space is getting kind of crowded though, which is part of why Citigroup’s startup venture capital arm just invested in a newer cryptographic solution by a company called Dyadic.

“There are established vendors of hardware security models and systems we all buy from. They’re trying to prevent or detect threats. We’ve invested in that,” said Arvind Purushotham, global head of venture investing at Citi Ventures. “The Dyadic opportunity came along and was fairly unique, there are not 10 startups in their area.”

Dyadic is a software company that helps companies manage their cryptographic keys, a long string of numbers required to encrypt private information. Citi Ventures participated in a $12 million growth investment in Dyadic along with Goldman Sachs Principal Strategic Investments and Eric Schmidt’s Innovation Endeavors.

In many current systems, there is a key to encrypt and one to decrypt. Dyadic’s solution effectively splits each key into two and allows them to be stored in different places – one half on a company server and the other on a mobile phone, for example, or one half in the cloud and the other in a data center. This way, even if a hacker somehow obtained the part of the key stored in the cloud, it couldn’t use it to decrypt information without finding its pair. The solution isn’t completely unhackable, but it creates an additional challenge for nogoodniks.

The technology is also easy to implement at the types of large financial institutions that would benefit from the product, he added, which counts for a lot when deciding to invest in a company. It’s rarely ever about how innovative an idea is. Most companies using Dyadic’s solution probably already employ cloud storage and have an increasingly large mobile customer base.

“[Dyadic] plays to the trends of cloud, mobile and enables us to make mobile offerings even more powerful not just at Citi but at any enterprise,” Purushotham said. “It is lowering the complexity and cost of a cryptographic system and if you can make it cheaper and easier to use, enterprises will use it more, and more commerce can happen online more securely.”

However, defending a bank and its customers against cyberattacks is as much – if not more – about how companies identify and verify their customers when asking them to hand over sensitive information as it is about identifying the attackers. Many websites now require numbers, capital letters and special characters of their users’ passwords, in order to make their accounts harder to breach. Some have employed fingerprint authentication and let customers store credit card information so they neither have to enter their credit card information or their password.

But financial services is one of the most highly regulated industries, and it has many reasons for requesting certain sensitive information. Some are business-related, but many come back to regulatory compliance.

“Security is sort of a murky problem,” Purushotham said. “We need to collect what we need to collect for a variety of reasons but it’s also our job to ensure the data stays secure inside the enterprise and make it simple for customers to use our services while still making it secure.”

Posted on

Citibank’s Julie Booth on activating customer passion points

On this week’s podcast we have Citibank’s Julie Booth. She is a senior vice president in the cards group focused on social and content strategies for North America. She spoke at the Tradestreaming Money Conference in New York City on November 14.

Her presentation described how marketers at leading financial firms can target customer passion points. Julie’s team works to create social ambassadors — customers who scream from the mountain tops how happy they are to be working with Citi. Julie describes Citi’s surprise and delight campaigns that identify social opportunities to provide extraordinary service to a customer. From there, social teams encourage happy clients to share their experiences with their own networks.

Listen through to the end as Julie fields a couple of interesting questions from the crowd.

Subscribe: iTunes I SoundCloud

Below are highlights, edited for clarity, from the episode.

From business priorities to passion points

We don’t have a large team at Citi, but we service various categories, including proprietary products, services, co-brands, entertainment, and cross franchise, with social media, content, and innovation. We pump out ten thousand pieces of content every quarter and every single one of them needs to be approved by compliance and legal. We’re trying to speak to our customers’ passion points.

Citibank's Julie Booth on customer passion points

We identify the things our customers are excited about, whether it’s travel, retail, auto, dining, or sports and we offer experiences and access for any of these types of customers. It’s an experiential one-stop shop. No matter what you have a passion for, you need money to do it. You need a reliable payment method to do any of these things. Can a financial services firm offer great value for using its card that others aren’t?  What kind of experience can you offer that would get your customers shouting from the mountaintops that they’re proud Citi customers? That’s how you build social ambassadors — the access you provide to say, a Billy Joel concert, needs to be unique, memorable and community-driven (customers should be encouraged to share images from the event). Lastly, curate that community element to show everything you’re giving card members.

Data

“You can’t control what you can’t measure.” What we’ve noticed is that when it comes to bragging about corporate wins, you’re not going to dump a data set on a managing director’s desk. She just doesn’t have the time. Talk to your line of business, determine your priorities, take a cluster of metrics and construct a narrative summary to deliver to the higher ups. You need to tell a story. Hard metrics are always available but you need to control the narrative to show what success looks like. We tailor our performance narratives to different groups within Citi.

Key takeaways — surprise and delight

We sponsor thousands of events with our partner, LiveNation. We offer special access to Citi cardmembers to things like football pro camp with Rob Gronkowski. When we promote these experiences across social media, we don’t just publish dryly. For example, our social team shares images of music artists, asking our audience about their favorite songs. You have to amp it up.

We do social listening and sentiment to identify opportunities to surprise and delight our customers. When someone tweets that they want to go to a concert, our team direct messages them with two free tickets courtesy of Citi. But you can’t just say, “We have 2017 season Mets tickets.” You have to say something like “Bleed blue and orange.” Understand who these people are, so you can tailor your content and copy to the passion points of each person.