Lag, Then Lead
1998; American Bankers Association; Volume: 90; Issue: 5 Linguagem: Inglês
ISSN
0194-5947
Autores Tópico(s)ICT Impact and Policies
ResumoYou have to be a little envious of a company that can industry leaders and then all at once grab everyone's attention when it makes its catch-up move. In the case of Citicorp, the proposed merger with Travelers Group is just the latest example. Here's a bank that mostly sat out the recent waves of industry consolidation and then pops the cork on the mother of all mergers, catching everyone by surprise. (The deal is big even in the context of the Bank of America/Nationsbank and Banc One/ First Chicago mergers, announced one week later.) Lost in all the noise about the unique Citi/Travelers merger, but laid out in out cover story this month (p. 40), is the significant turnabout in Citicorp's technology strategy. Managing Editor Alan Levinsohn, in the process of tracking down the details of Citi's $750 million global outsourcing deal with AT&T Solutions, announced just weeks prior to the merger, uncovered a major shift under way at the country's number two bank. The article is Levinsohn's first since joining our staff in March. He brings a strong institutional and technology background to the magazine from stints at Securities Industry Daily and Waters Information Services, and will be responsible for much of our technology-related coverage. The merger announcement, in fact, gives added significance to our article, because, as Business Week writer and Citicorp chronicler Phil Zweig observes, the real key to this deal will be the success of cross-selling, and the key to the success of cross-selling is technology. Given the complexity of blending somany disparate systems, and Citi's more relaxed outlook on outsourcing, the deal, if approved, could be a bonanza for systems integrators. In truth, there is nothing new to Citicorp's lag-behind/vault-ahead behavior. In the mid Seventies, for example, when automated teller machines began sprouting around the country, including in New York City, Citibank (still called First National City Bank then) was for a long time quiet. Then in one fell swoop in 1977, the bank installed more than 400 ATMs- two in every branch around the New York metropolitan area. The effect was electric. No bank had installed so many machines at once, nor saturated its primary market with them. The bank's apparent was in part because it wasn't satisfied with the available hardware. Once it had what it wanted, Citi's ATM strategy moved it to the top of the New York City retail market. By contrast, Citi's merger lag was more a change of heart than a long-held strategy. …
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