55628357 citi bank e strategy

8/11/2019 55628357 Citi Bank e Strategy

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Santhosh Kumar

Rajkumar


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Citibank was incorporated in 1812 asCity Bank of New York

Merged with Travellers Group in 1998,

changed its name to Citigroup Inc. In 1990s, Citibank focused oncustomer service

In 1997, one of the most profitablebanks in the U.S.


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In 2006, 325,000 staffs serving 200million customers in over 100countries

In 2007, Citibank face a toughdecision along with subprimemortgages


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In 2000 Intense competition and dot comboom force Citibank and its competitorstransform their business.

The strategy was Connect Transform andExtend.


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There were different needs for differentcustomers (MNCs and SMEs)

How could Citibank integrate the Internet

into its strategy and create competitiveadvantage?


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Transaction services: cash management,tradeand custody services

Corporate finance services: working capitalfinance, trade finance, asset based financing

Treasury market services: hedging andforeign exchange


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In pricing policy, Citibank emphasized on customerservices(response time,technology, support)

By offering outsourcing Citibank,it Secured all thebusinesses from the customer

Gained a total relationship with the customer Obtained economies of scale with a large number

of customers

Result,Client minus paper based payment and

client could concentrate on core business. All happened due to better and comprenhensive

use of technology.


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Large Corporation wanted to sell productsdirectly via internet and not wholesalers.

Demand for online E Business solutiongrew.Eg:online payment collection and web-enabled financial processes.

SME were also involved in Internet.Wantedonline services


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Clients were looking for improving theirpayment processes. They demandedelectronic, invoicing, automatic application ofpayments to accounts receivable,multi

currency payment,online payment gurantee.s

Need for improvement in their payment processes.

They demanded electronic, invoicing, automatic

application of payments SWIFTNet,SCORE


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New technology required major investment inpeople, risk and technological services andfew banks were competing at the globaltransactions services marketplace

Deutsche Bank and Citibank were two leadersand ABN AMRO was also developing itsproduct range.

MNC who developed their own bankingsolutions products


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Formation Internet Operation Group:committee charged with spreadingresponsibility for internet activities

2 unites created (2000): E-consumer and E-Business(aim to infuse internet into allconsumer and corporate banking activities)

In May 2000 E-capital markets and E-asset

management units


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Created as division of Citis Markets &Banking.

Main Job-integrated cash management,fundservices,securities services,trade services

Aim-Customers have control over financialposition,increase efficency and reduce cost.

Over 95% Fortune companies tapped GTS.


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Customer Convience (web enabling services) Key to provide more channels to access

citibank ,its products & Services.

CitiDirect

Designed for corporate customers

Customers can perform various transactionson-line

Transactions take place in real-time In 8 months, 1000 customers were using it


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Transaction processing was aheadache(involved lot of paper work)

Responsibility of Bank to take care of TP.

Regionalization

Process involves consolidating all datacenters and merging them in Singapore

Data is centralized

In May 99, the number of data centers weredecreased to 60


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Provided continual improvementopportunities

Reduced the time cycle for transactions

Minimized error rates to near zero

Yielded new efficiencies for Citibank andcustomers


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Building a new global infrastructure gaveCitibank the opportunity to:

Deliver e-products more quickly and moreefficiently

Ability to install capability improvementsfrom one regional area to world-wide


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According to an online banking report

published by Ernst & Young, the transactioncosts of the various banking channels are as

follows: Branch $1.07 Call Centre (human) $0.85 Automated Response System (AVR) $0.44

Automated Teller Machine $0.27 Dialup PC banking 1.5 Cent Internet Banking 1 Cent


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Number of active Citibank Online customers

New accounts opened through Citibank Online


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The degree of innovation Extend to which the new functions are integrated

within the business model

Technology: ( In-House or Outsourced? )

Large resources Ubiquity

Security IPIN Secured Login Automatic time out Automatic lock out Digital certificate from Verisign


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Execution

IS audit Meet the information criteria established in COBIT

Aspects to Review

Due diligence and risk analysis are performedbefore the bank conducts Internet banking activities Due diligence and risk analysis are performed

where cross-border activities are conducted Internet banking is consistent with the banks

overall mission, strategic goals and operating plans Internet application is compliant with the defined

and approved business model


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Huge legacy systems to carry forward Credit Bureau

Partnership with industries

Government Encouragement Priority Sector

Credit Guarantee

Convergence

Financial Services e-Solutions

Value Added Propositions


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Thank You!!

55628357 citi bank e strategy

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