Citibank's E-Business Strategy for Global Corporate Banking

Citibank's E-Business Strategy for Global Corporate BankingGroup 5CASE BACKGROUNDFollowing an intense competition in 2000, Citibank started to establish its e-business strategyAn internet platform should enable all customers with similar needs to conduct business onlineThe case tells about Citibank's challenges in serving corporate customers with diverse needsCompany BackgroundCitibank was founded in 1812 as City Bank of New YorkThird largest bank company of the United StatesGlobal bank with almost 4000 branch locations in 36 countriesAround 20% of Citibank's revenues are made in the Asian marketTheir online services division is among the most successful (15 million users)The impacts of the internet on the competitive landscape of corporate bankingTransformation from traditional banking to online banking caused by growing global marketsE-services became a necessary tool for clients to avoid paperworkBanks needed to offer online services in order to:keep up with their customers needs be competitive on the financial marketThe differentiate productsCustomer service (web and telephone payment capabilities) customized internet payment application platform Investments in technology to support front-end and back-end electronic systemsThree core products (Transaction, Corporate Finance and Treasury Market Services)Unified platform and group-wide expertiseOnline investment applications for short-term investments (Treasury Vision)Citibank competitive advantageGlobal reach and long lasting local commitmentStrong brand recognitionContinuous investment in technology to improve its servicesHow to Migrate ProductCitibank's huge transactional business which did basic, repeatable processes could be commoditizedRegionalization by consolidating all data center within each country and moving them to Singapore where centralized data and automated processes were establishedIntegrating the web into business processes by incorporating secure databases into the processing of a transaction Straight-Through-Automation (e.g. intelligent programs)Citibank action taken to serve the need of two very different market segmentsCitibank's main goal was to shift all customers to CitiDirect in order to make them use e-business instead of the traditional banking systemsWhile MNC's didn't have problems with conducting business online, most SME's were concerned about the security issuesTo solve this problem, Citi Direct developed the newest security procedures (access keys, single-use passwords)To encourage conservative customers they lowered the prices for using online businessWith the market changing so rapidly Citibank identify market needsCitibank's first strategy to specialize in every market segment (front-end services, software and system development) failed, because it couldn't keep up with changing client needsThen they focused on alliances and the use of their partners' strengthsTherefore Citibank corporate with companies that had complementary technology, infrastructure or access to markets (Oracle, SAP AG)Citibank protect its clientsCitibank made sure that vendors and suppliers were aware of their strategy and would not exploit the bank's existing strengths in the financial industryPotential partners had to see the value that Citibank gives them (financial services expertise, brand, global presence)External EnvironmentIndustrial EnvironmentSWOT AnalysisConclusionMany areas in banking were affected by the internet. Meanwhile customer changed their expectations and needs through developing technologies. To adapt to these changes without losing its traditional strengths and adding extra value for their customers, Citibank formed a global web platform that enabled customers to conduct their business online.