Academic journal article ABA Banking Journal

An Old Snapshot of Citibank's Ferocious Technology Quest

Academic journal article ABA Banking Journal

An Old Snapshot of Citibank's Ferocious Technology Quest

Article excerpt

In the late 1960s, 'Reed, like Wriston, was a Lone Ranger," according to the book, Wriston: Walter Wriston, Citibank, and the Rise and Fall of American Financial Supremacy, by Phillip L. Zweig. "In no instance was that more evident than in his conviction that Citibank should reinvent the wheel, or the computer, or even the microchip Reed believed that for the bank to compete for consumer business, it had to build its own technology."

At Reed's behest, Citibank set up its own off-site technologyresearch-and-development center, Transaction Technology, Inc.

TTI was where Citibank invented some now-ubiquitous banking technologies such as credit card authorization systems and transaction processing systems-and some technologies that didn't become mainstream. Was it worthwhile? The bank wasted "hundreds of millions on Transaction Technology, Inc.." said ex-Citibanker Frank Partel in Zweig's book. 'There was nothing IBM couldn't do."

The time is now!

Perhaps so, but whether IBM was willing was another matter, Reed asked IBM to build a transaction processing system and Big Blue said, "Come back in a few years," Zweig writes. IBM wasn't willing to go faster than the bulk ot the market.

"Reed was trying to design software to meet our needs," said DuWayne Peterson in an interview last month with ABA Banking Journal. Peterson, now with Standards Testing Assurance Corp., worked for Citibank under Reed in 1970. IBM may have been dominant in hardware, said Peterson, but "at the time it wasn't clear these technologies would be effective internally, and Reed put Citibank miles ahead of everyone else and set the course of how banking and technology is still being put together today."

"Reed was not prepared to wait for the rest of the American banking industry to achieve his vision of the bank of the future, Zweig writes: "If he was to make the future happen now, he would have to design its own machines and software."

In 1973, Citibank introduced the Citi-card allowing customer to dip their cards and determined their balances and other account information. …

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