As the world’s biggest credit-card issuer, Citigroup Inc. has enough plastic in American wallets to tile a path from its New York headquarters to the southern tip of Florida.

Yet many of those 28 million clients park their savings elsewhere.

The gap between Citigroup’s credit-card strength and the rest of its retail banking franchise has grown starker in recent years: Citigroup’s deposits from U.S. consumers shrank by $5.4 billion in 2017 and 2018 as a slew of competitors launched or expanded digital platforms. Goldman Sachs Group Inc., for example, has amassed tens of billions of dollars in retail deposits, mostly from the U.S., since opening an online bank dubbed Marcus in 2016.

Now, Citi is fighting back.

After quiet experiments, the firm is expanding perks designed for credit cards to encourage sales of other banking products. In recent months, the company privately offered some cardholders 30,000 airline points to sign up for an online checking account. And this quarter, it plans to enhance its Thank You and Double Cash reward programs for select cardholders to encourage them to sign up for more products and services.

Executives are hoping Citigroup’s card dominance will propel a new digital banking platform, launched last year, to build it into a juggernaut.

“We go in already having these established Citi customers,” Chief Executive Officer Michael Corbat told investors on an April 15 conference call. “We know who they are, we know what they spend on, we know who their bank is, we’ve seen their payments come in if it’s not us. And we think we’ve got the ability around our value proposition to target them with offers.”

Citigroup’s strategy shows the advantages that large traditional banks wield as they look to fend off disruptors chasing billions of dollars in annual revenue. While new entrants have proven it’s possible to snap up customers with lower-cost technology, giant banks have ample resources to roll out counter offers, as well as relationships with millions of Americans and decades of data on their habits.

Early Success
Early testing proved promising, Corbat said. Digital deposits -- those gathered in accounts opened outside branches -- jumped in the first quarter by about $1 billion, more than what it collected that way all of last year, Chief Financial Officer Mark Mason said. More than half came from outside the six metropolitan areas where the bank operates most of its U.S. branches.

That drove a turnaround: Total U.S. consumer deposits rose 1 percent during the first quarter, after five straight quarters of declines.

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