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!!