About a year after announcing plans to develop e-commerce as a significant part of its operations, Citizens Financial Group has rolled out the first of its products, hopeful it will not only mean new profit centers, but also stronger relationships with current customers, and help the bank win new ones.
The first of the products is geared for small and mid-sized businesses, a new Web based buying network called Citizens Bank BizMart. Citizens is one of nine banks that formed an alliance with eScout.com, an e-commerce network solution company based in Lee’s Summit, Mo.
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This is the first of what bank officials expect will be an increasing commitment to online products.
“Over time the concept is to expand beyond procurement for small businesses to a small business solutions center, where human resource, 401K” and other products will be available, said Hal R. Tovin, group executive vice president of Citizens’ emerging channels group. Those products may become available through the eScout partnership as that entity continues to grow.
Tovin also said the bank is exploring options for retail customers as well, but has not developed a particular time frame in which it will introduce those products. “I learned last year not to be time frame driven,” he said.
Meanwhile, the bank has unveiled BizMart, its partnership with eScout.com. that not only survived a trial last fall, but was twice as successful as bank officials had anticipated, Tovin and other bank officials said.
eScout (BizMart) is an on-line distributor, gathering a number of suppliers who want to tap into a growing customer base, those that sign on through the banks’ network, now at about 10,000 customers. eScout is the “middle man.”
Citizens unveiled its BizMart program at the same time Fleet Financial has unveiled its smallbiz.fleet.com, a program that includes personalization and account aggregation capabilities powered by Yodlee, a Redwood Shores, Calif., based company. The Fleet program includes a variety of sources for Fleet customers, sharing the Citizens concept that small businesses are “time-starved.”
Fleet said its service through Yodlee enables a business to customize its own page, to aggregate online account information, to create an online safe deposit box for document storage, provides for online applications for various Fleet accounts, and also has a “BuyerZone” that links the customer with an array of suppliers.
Tovin and Mark Formica, Citizen Financial Group’s vice chairman emphasized the importance to Citizens of maintaining its branding throughout.
That branding, they said, is a key to consumer confidence and, for the bank, continued identification with Citizens. It also allows the bank to maintain a strong identity with BizMart users, and, said Lisa Stanton, executive director of strategy and development for Citizens e-Business, is a tool in the bank reaching out to those who join BizMart, but who are not bank customers now.
Here’s how the program works: A business signs on with Citizens Bank BizMart – and you don’t have to be a Citizens’ customer — and has access to a large group of suppliers that display their products. The products are offered at a discount and the customer has an opportunity to choose from a number of suppliers.
The suppliers pay a fee to eScout to be part of the network, the bank pays a license fee, but in return gets a payment whenever one of its customers buys from a participating supplier. Additionally, Citizens Bank has invested in eScout, owning slightly less than 5 percent of the company. Tovin is on the board of eScout.
The strength of the arrangement, Formica said, is in the ability of eScout to reach Citizens customers who sign on for the program. In the past, he said, dotcom companies failed because they spent so much time and money trying to attract customers. In this case, the partnership provides the customers. Suppliers are attracted because they can reach potential customers who would not otherwise have been drawn to their company.
Tovin calls this e-catalyst, helping companies gain discounts and access to suppliers that they would not ordinarily be able to do.
“Here’s something else we can do to grow your business,” Formica said. “We’re capitalizing on the reality that small business is always stressed for time and content. Large firms have their own departments. The owner-partner (in a small business) is doing everything.”
Citizens was drawn to eScout because, Tovin said, the company’s CEO is Alexander Kemper, a former chairman of UMB (United Missouri) Bank who understands banking concerns, and because eScout was an established Web-based e-business network.
