Citibanks E-Business Strategy for

Global Corporate Banking

Hanindita Guritna 29114713
Michelle Monica Alexandra 29114727
Edwin Lumenta - 29114760
Eska Anisa N. F. A. - 29114777
Rini Amelia - 29114857

Introduction

1812 :
Incorporated
as City Bank
of New York

1976 :
Experienced
several mergers
after its
inception, the
name Citibank
N.A. was
adopted.

1990s : Citibanks
corporate banking
activities evolved
from a highly
decentralized set
of operations to
becoming more
centralized
1998 : Following its
merger with Travellers
Group, the holding
company changed its
name to Citigroup Inc.
(Citigroup)

2006 : Citigroup
employed 325,000
staffs serving 200
million customers
in over 100
countries and had
an information
technology (IT)
expenditure of
US$3,762 million

2008 present :
Developing its ebusiness by
serving several
segments of
customer (MNCs,
SMEs, and
individual
customer.

What are the impacts of the internet on the competitive

landscape of corporate banking?

Definition of competitive landscape

A form of analysis that helps a business identify its primary online

and offline rivals / competitor. It begins with a review of the

competitors' market presence by customer segment, along the
value chain and/or by geographical market. Analysis of
competitors' strategies may then be conducted in terms of
products and services, strengths and weaknesses and growth
models.

The impacts of the internet on the competitive

landscape of corporate banking

Increasing demand of the customers of corporate

banking about e-transactions, such as e-payment, einvoicing.
2. Forcing the corporate banking to provide more
sophisticated e-business solutions
3. Emerging collaboration between the multinational
company (MNC) with the bank for creating more
developments
1.

What has Citibank done to differentiate its e-business

products from those of its competitors?
-

Theory of Differentiation

Literally, differentiation is result of efforts to make a product

or brand stand out as a provider of unique value to customers

in comparison with its competitor
Citibanks strategy to differentiate

Serving people by creating efficiencies and opportunities

through e-commerce
The vision: to become the worlds leading e-business enabler
(delivering online transaction worldwide)
E-business Strategy : Connect, transform, extent
Besides, it has 6 key elements of its E-Business Strategy

E-Business Strategy

Connect

Transform

Web-enable its core

services to connect
with its customers

Draw the full range of

Citibanks capabilities
to deliver integrated
solutions

Extent

Reach new market, ne

customers, and new
products

Six Key Elements of Citibanks E-Business

Strategy

 Forming an internet operation group (E-business structure)

Task: The committee charged with spreading responsibility for

internet activities
Programs: E-consumer and e-business in purpose of infusing
internet into consumer and corporate banking activities
Having continuous improvement in technology and having

alliances in technology
- The alliances are Oracle, Commerce One Inc., SAP AG,
Wisdom Technologies, and Bolero.net

What can Citibank do to create competitive

advantage?
Theory of competitive advantage
Competitive advantages give a company an edge over
its rivals and an ability to generate greater value for the
firm and its shareholders. The more sustainable the
competitive advantage, the more difficult it is for
competitors to neutralize the advantage.

Porters Generic Strategy

The Emergence of Competitive

Advantage
How does competitive
advantage emerge

External source of change e.g.,

Changing customer demand
Changing prices
Technological change

Resource heterogeneity
among firms means
differential impact

Some firms faster and

more effective in
exploiting change

Internal source
of change

Some firms have

greater creative and
innovative capability

Competitive Advantage
Based on the case, it is known that Citibank used differentiation
focus as its competitive advantage. To create its competitive
advantage, several ways Citibank took were:
1. Implementing an embedded bank strategy and
differentiating through customer service so that
Citibank could behave as a local bank in each country
2. Setting senior management from countrys citizen
3. Developing a strong brand recognition
4. Investing heavily on technology: for the main goal is to
provide the most cost effective, cutting edge, reliable,
and secure solutions

Citibank Converted Into E-business

In 2000, in response to intense competition and the dotcom

boom, Citibank made a decision to develop Citibank's ebusiness strategy ("connect, transform and extend").
Citibank aimed to build a single web-enabled platform for all

customers to access Citibank banking services.

Citibank was targeting different corporate customers, such

as:
Multinational companies ("MNCs") that required custom-built

host-to-host product interfaces.

Small and medium-sized enterprises ("SMEs"), were more
conservative and were not ready for web-based solutions.

Citibank Converted Into E-business

Citibanks huge transactional business which did basic,

repeatable processes could be commoditized.

Regionalization by consolidating all data centers within each

country and moving them to Singapore where centralized

data and automated processes were established.
Integrating the web into business processes by incorporating

secure databases into processing of a transaction.

Straight-Through-Automation (e.g. intelligent programs).

Issue That Citibank Should Take Into Account To

Ensure Successful Implementation
Citibank need to pay attention in foreign exchange

transactions, equities, deposits, settlement of trade

transactions and payment of insurance policies when
implementing e-business.
Citigroup's revenue grew 8% between 2005 and 2006.

However, its operational expenses grew by nearly 15%.

in April 2007, Citibank announced an overhaul of its IT

operations and cut 17,000 positions in order to save the

company more than US$10 billion in three years' time.

Issue That Citibank Should Take Into Account To

Ensure Successful Implementation
Since 2007, most large corporate customers had begun using

a new legal model for accessing SWIFTNet: Standardized

CORporate Environment ("SCORE").
By using the SCORE model, a corporate customer could

access all participating banks with only one agreement in

place.
SCORE also laid down rules for the messages that could be

sent within the SCORE framework.

If Citibank want to ensure successful implementation, then

Citibank should follow SCORE model.

Actions Citibank Has Taken to Serve The Need of Two Very Different Market
Segments, MNCs and SMEs

Characteristic : Required
custom-built host-to-host
product interfaces

Characteristic :

Action:

More conservative and were

not ready for web-based
solution

Offered Citidirect

Action: Offered Citibusiness

Actions Citibank Has Taken to Serve The Need of Two Very Different
Market Segments, MNCs and SMEs (contd)

Citidirect for MNC

Citidirect was designed for corporate
customers to do full transactions
online anywhere around the world. It
was a browser-based delivery channel
designed to deliver all of Citibanks
cash management and trade products
and services online, enabling
customers to make inquiries about
their account balances, request
statements, provide transaction
initiation
details
and
request
statement transaction reports online
and real time.

Actions Citibank Has Taken to Serve The Need of Two Very Different
Market Segments, MNCs and SMEs (contd)

Citibusiness for SME

Citibusiness was a one-stop financing solution
offered to SME entrepreneurs. Products and
services included: Citibusiness Direct (internet
banking); Cash Management ; Trade Services and
Trade Finance (trade products); CitiCorp
Commercial Finance (asset-based finance);
treasury products such as Spot and and Forward
Foreign Exchange, lnterest Rate Hedging, and
Yield Enhancement Investment Products; and a
customer center. Thc customer center provided
CitiService (an integrated customer inquiry line
for after-sales services), Document Collection (an
express collection service), CitiFax (a convenient
way to
update account information) and
CitiBusiness Direct (providing online access to
account information and transaction initiation).

How has Citibanks cash and trade group managed to develop different
e-business products for varied industries? With the market changing so
rapidly, how does Citibank identify market needs?

Continuous investment in technology

Formation of Internet Operation Group: committee charged

with spreading responsibility for internet activities

Created 2 units: E-consumer and E-Business
Aim: infuse internet into all consumer and corporate banking
activities
Decentralized approach: bring people from business lines and

internet side of operations together

Alliances: Oracle, Commerce One, SAP AG, Wisdom
Technologies and Bolero.net
FinancialSettlement Matrix.com: Connect buyers and sellers in e-

marketplace Identify market needs

One of Citibanks challenges is in managing vendors and

suppliers without allowing them to exploit its clients. How
does Citibank protect its clients from its strategic partners?
Make sure that vendors and suppliers were aware of their

strategy and would not exploit Citibanks strength in financial

industry
Citibanks values and strengths:
Financial service expertise: est. 1812

Global presence: Operated across 100 countries

Trusted brand: Viewed as innovative, global bank offering

excellent customer service