Published December 8, 2006
Next stop: Citibank ATMs at all 51 SMRT stations
Exclusive tie-up with ez-link will also break local banks' last stranglehold on ERP payments
By SIOW LI SEN
(SINGAPORE) Citibank is sweeping into Singapore's heartland through an exclusive tie-up with SMRT Corp that will see a dramatic increase in Citi branches and ATMs and the issue of ez-link cards.
Under the partnership, Citi will open 10 new branches at MRT stations - giving it the widest bank branch network at stations. It will also install 51 ATMs plus 51 Citibank-AXS bill payment terminals - covering all 51 SMRT stations.
Significantly, Citibank-SMRT ez-link co-brand credit and debit cards will position Citi to smash the final bastion of the local banks, which now have a stranglehold on electronic road pricing (ERP) payments. New generation in-vehicle units will accept ez-link cards.
Citi's 10 new branches - expected to open within 12 months - will more than double the bank's branch network to 19 and more than triple its proprietary ATM locations to 75. The first two new branches will open within three months - at Tiong Bahru and Bugis MRT stations.
Citi now has nine branches, 24 ATMs, over 370 Citibank-AXS terminals and more than 140 ATMs under the shared ATM5 network with the other four foreign banks.
'This partnership with SMRT represents a major step for Citibank as we reach deeper into the heartlands of Singapore to serve all segments of customers,' Citibank Singapore chief executive Jonathan Larsen said yesterday at the launch of the partnership with SMRT.
'It will also enable us to provide unparalleled convenience and value to everyone in Singapore every day.'
Mr Larsen said that in the past 18 months Citi has expanded its physical touch points from just five to more than 500, including branches, ATMs and the partnership with AXS. 'The added accessibility has been particularly well-received by our heartland customers, who make up 64 per cent of our total customer base,' he said.
SMRT president Saw Phaik Hwa said: 'This collaboration with Citibank, a global banking giant, is a milestone for SMRT.
'Citibank's presence in our 51 MRT stations is in line with our drive to transform our MRT stations into lifestyle destinations of choice.' Citi's strategy of giving people more banking choice poses a formidable challenge to the other banks operating here - in particular the local banks, which have seen their costs rise in recent years and have tried to prune their branch networks.
Now, Citi's aggressive penetration of the heartland along MRT lines and through ez-link will make things even harder and more expensive for the competition.
SMRT passengers make two million trips daily. And through its exclusive tie-up with ez-link, Citibank is poised to break into the ERP system.
ez-link's senior vice-president of business and technology Nicholas Lee said: 'We, Citi and SMRT are quite excited at exploring this new market.' Mr Lee noted that the new market is not just for ERP but also for carparks all over Singapore which accept in-vehicle cashcards for payment.
The in-vehicle cashcard now issued by Nets, which is owned by the three local banks, is incompatible with the ez-link card, which has lead to many complaints from Singaporeans.
Mr Lee said ez-link is working closely with the Land Transport Authority on new generation in-vehicle units that will accept ez-link cards. Citi's rivals yesterday shrugged off its latest challenge.
'Competition is not new to us,' said a United Overseas Bank spokesman. 'The Singapore banking industry has been liberalised for some time and there is little the foreign banks cannot do.'
And a DBS spokeswoman said: 'As it stands, DBS has the largest ATM network in MRT stations.'
Indicating that DBS may fight Citi for some MRT locations allocated to the highest bidder in a tender, she said: 'The bank is always on the look out for suitable locations to situate our branches, and some of these locations may include MRT stations.
'The crux of the matter is the reach and accessibility of our ATMs. Where we are not in the stations, our ATMs are situated within easy access of our customers - we are in the nearby HDB estates, shopping malls and/or petrol kiosks.'
DBS has 81 branches and more than 800 ATMs in Singapore.
OCBC Bank's head of delivery, group consumer financial services Patrick Chew said that while MRT stations are an integral part of the Singaporean lifestyle, the bank's market studies show that crowds at stations tend to be fluid and transitory.
'As such, customers' banking transactions tend to be simple and quick in execution,' Mr Chew said.
'We find that these can be served by well-placed self-service ATMs in and about MRT stations. We also find that it is more appropriate for our branches to be situated close to transportation hubs.
'Places where we are able to serve a wider crowd and where customers have more time on their hands to conduct their financial matters.'
Foreign bank Maybank noted that all foreign banks will be able to leverage on Citi's expansion through the ATM5 network.
'The additional Citibank ATMs will expand the ATM5 network and it will benefit customers of the five qualifying full banks (QFBs),' said a Maybank spokeswoman.
The QFBs are ABN Amro Bank, Citibank, HSBC, Maybank and Standard Chartered Bank.
