Michelle Peluso, global
head of marketing and internet banking at Citigroup, tells Douglas
Blakey that Citi is on target to become the world’s leading
financial services player in the digital space. In the next year,
Citi will make major announcements in terms of its mobile, online
and tablet banking offerings.


Photograph of Michelle Peluso with CVIt is
just as well Michelle Peluso likes a challenge. When Peluso joined
Citigroup in 2009 as global chief marketing officer, Citi was in
the mire.

In fiscal 2008, Citi had
posted a record annual loss of $18.71bn; Citi’s consumer banking
and global cards divisions combined to lose $3.55bn and the bank
abandoned its 20-year-old business model with a split into two
operating units known as Citicorp and Citi Holdings, or ‘good bank’
and ‘bad bank’ respectively.

In addition, its brand value
has hammered in the US – but, notably much less so outside the US –
not helped by the news that it had received $45bn of TARP

“Risk is a loaded word in
banking, but I’ve always tried to make some decisions that are a
little risky and they have paid off,” Peluso tells

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“I came to Citi because it is an
incredible brand. We almost have a challenger mentality, pushing
out new ideas, and in digital I can really push the boundaries of
what is possible.

“To be in the digital space,
you have to be passionate about digital as it is such a dynamic,
exciting time.”

Prior to joining Citigroup
and still not yet 40 years of age, Peluso had an outstanding
business record. After a spell with Boston Consulting and a stint
as a White House adviser she set up Site59.com, an online travel
agency sold to Travelocity for more than $40m.

There then followed a seven
year spell as president and CEO of Travelocity where she was
credited with turning around the fortunes of the online travel

But when Peluso joined Citi,
its internet banking channel was anything but cutting

As for Citi’s mobile banking
channel, it languished in a very poor fifth place in the US in
terms of users, way behind rivals such as Bank of America, Wells
Fargo and Chase.

Its m-banking performance
prompted Citi CEO Vikram Pandit to tell RBI in 2008 that
he was very disappointed with Citi’s m-banking uptake and said that
it marred the bank’s global distribution ambitions.

That however is changing
dramatically, under Peluso’s leadership.

“When I joined Citi, we
offered m-banking in only 12 countries out of the 40 retail markets
around the world where we operate. My goal is to offer m-banking in
all 40 countries by the end of this year.

“Previously, Citi’s m-banking
focus was not as high as it could or should have been.This is an
aggressive timeline but we are tracking nicely to the end


Tablet banking to
launch in Q3

Bar chart showing customer satisfaction with primary bank websitesAs well as
rolling out Citi m-banking in an additional 28 countries, Peulso
evangelises about the potential offered by tablet

The imminent launch of a
tablet banking service will form a major part of what Peluso
describes as a “drumbeat of almost monthly improvements” to boost
Citi’s multichannel offering.

While a small number of US
lenders – notably USAA, BB&T and BBVA – have rolled out tablet
banking, Peluso argues that none of them are a patch on the service
Citi will introduce.

“I’ve seen them all but just
wait until you see ours. What most firms have done, basically, is
to blow up their mobile banking application and put it on a

“That is a nice first step
but with the tablet there is scope to do so much more. You can
share graphics and really take advantage of the tablet’s
Bar chart showing internet rankings at the 6 largest US retail bankscapability.
Also, you have to remember that people use tablets differently to a

As for the online channel,
Peluso said that Citi have some really big ideas to

“In my global capacity at
Citi, I see a real opportunity to enhance a consistent web

So for the past year, Citi
has invested in a programme of online infrastructure development
with the aim of offering one seamless experience across the digital

The annual comScore 2010
State of US Online Banking report – an annual in-depth look at the
online banking industry with emphasis on customer satisfaction and
online service usage – highlighted just how much scope Citi had to
improve its internet channel.

Bar chart showing online banking growth in the USOf the major US
retail banks, Citi ranked bottom in the comScore 2010 survey, with
a customer satisfaction rating of only 59%, 4% behind Chase and
Bank of America, and 9% behind Wells Fargo and PNC.

Fast forward 12 months and
Citi’s online investment is already paying off, highlighted by the
results of the Forrester’s 2011 US online sales bank

Forrester evaluated the
checking account user experience, content, functionality, and
online application for the six largest US retail banks – Bank of
America, Chase, Citi, PNC, US Bank, and Wells Fargo – with Citi
taking the top spot scoring 71 out of 100. Looking across other
(non-banking) industry sectors for inspiration, Peluso admires the
digital offerings of Pepsi, in particular its work in the social
media space, and Apple for its innovative design.

bar chart showing the total display ad impressions in 2010 at selected US banks“We must
think across channels, how can we make our digital service
intuitive? We must think contextually; we have loads of data but
how useful is that for consumers?

“Netflex and Amazon for
example are very thoughtful about data, while I admire Facebook and
FreshDirect for the way they stress the importance of being

The social media space is one
area where Citi is arguably ahead of its major rivals.

Peluso made a key hire
bringing in Frank Eliason last year – in his time at Comcast he was
described as one of the forefathers of the social media movement –
to lead Citi’s social media strategy.

This incorporates Twitter,
Facebook, YouTube and blogs to connect with customers.

“Frank has done a fantastic
job,” says Peluso. “At the start, the focus was to service
customers reactively, but now we are proactively servicing
customers. There are four stages you have to get right: listening,
servicing, engagement and, lastly, marketing.

“If you are not listening to
your customers, you will make mistakes. There is just a huge
opportunity here. We are listening to and monitoring about 200,000
comments about Citi every month.

“If a customer has a problem,
we can jump in and really try to turn around a tough experience for
a customer, say with a mortgage or a loan.

“As regards to engaging
consumers, we have a really exciting project with Facebook set to
launch. We will also leverage our rewards programme ‘Citi ThankYou’
into our social media strategy.” In terms of marketing payback,
Peluso could not be more bullish.

“There is already a return –
absolutely. The customer net promoter scores I see coming through
are really positive. Social media is a big amplifier of our media
dollars. The marketing spend is not a lot of money – there is scope
to increase investment.

“We are making really good progress across the digital
space and I am really happy with the results so far, but I just
want to keep setting the bar higher,” concludes Peluso.

Table showing the largest 6 retail banks, internet channels ranked by user experience, content and functionality