Hidayet Bahadin, Berk Vardar, Omer Oy ve Emrehan Seyhan

Global Corporate Banking at Citibank

Citibanks Cash Management and
Trade Services
Changes in the Global Environment
Citibank e-Business Strategy
The Citibank Advantage
Conclusion

In 2000, Intense competition and dot

com boom force Citibank and its
competitors transform their business
The strategy was Connect, Transform
and Extend
There were different needs for
different customers (MNCs and SMEs)
How could Citibank integrate the
Internet into its strategy and create
competitive advantage?

Citibank incorporated in 1812 under the name of

Citibank of New York
Experienced several mergers
Citibank N.A. Was adopted in 1976
After the merger with Travellers Group in 1998 the
name is changed to Citigroup Inc. n 2001
By 1997 Citibank was one of the most profitable
Bank in US with US$3.59 billion
The core products were grouped into Transaction
Services, Corporate Finance Services and
Treasury Market Services

Target corporate clients were multinationals,

government sectors, local corporations and
SME businesses
Approximately US$1 trillion worth of financial
transaction were cleared around the world daily
(foreign exchange transactions, equities, deposits,
settlement of a trade transaction or payment of
insurance policies)
It differenciated itself by offering telephone
hotlines, relationship managers, continuous
investment in technology.

Cash and Treasury

Products
Find

ways to move money around in

most efficient manner possible
Accounts Recievable Process
Management, Accounts Payable
Process Management, Liquidity
Management.
Trade Products
Trade Finance, Trade Services, Trade
Support Services for import/export
transactions

Pricing and Customer

Services

Standart price for each service but price

discrimination by client volume and value.
Emphasis on response time, technology and
support gave confidence to customers
Customers dont deal with paper based,
highly manual intensive payment and
collention process.
Citibank secured all the business from the
customer and gained a total relationship with
corporate customers when they outsourced
all the back-end processes

Smarter and Tougher Customers

The Internet allowed many corporations to sell their
products directly to users rather than selling solely
through wholesalers.
Customers were demanding more sophisticated e-business
solutions in accordance with the increasing usage of the
Internet. Solutions such as online payment collection
and web-enabled financial processes.
In addition to corporations, middle market companies were
also more interested in online services, so a bank
should follow their businesses and needs carefully to
provide top quality solutions.

Clients were looking for improving their payment processes.

They demanded electronic, invoicing, automatic application of
payments to accounts receivables and on-line payment
guarantees.
On the payment side, multi-currency payment management and
payment aggregation by invoice and currency were required by
businesses. They were looking ways to eliminate paper disputes
by attaching information to payments.
Despite the boom that was expected in B2B e-payments, large
majority of the B2B payment were made by cheques in addition
to automated clearing house networks, a non-internet system.
Majority of SME were using cheques and corporations that use
ACH networks did not have integrated data.
Other methods were also available such as: Notes, coins,
bankers draft, credit cards, special presentation of cheques and
transfers.

Some MNEs started implementing their own web-enabled financial

products before the banks and disintermediated banks. There were
also other MNEs that expressed their interest of cooperation with
banks for future developments.
This required vast resources, and consolidations that were taking
place meant fewer bank were competing for this market. Citibank
and Deutsche Bank were leading the competion while ABN AMRO was
also following from behind.
In Early 2001, Deutsche launched global db-Ebills payment service
which could deal with various currencies, languages and business
practises.
Other large banks were cooperating also for providing their
customers single global solutions. In International Cash Management
(ICM) companies work with lead banks or their local partners.
Although most of the Fortune 500 companies preferred Citi for these
purposes, Citigroup faced fierce competition also from tech
companies who provide similiar solutions.

Serving people by creating efficiencies and

opportunities trough e-commerce is
Citibank's main aim

Vision:

to become the worlds leading ebusiness enabler (delivering online

transactions worldwide)

E-business

and extend

strategy: connect, transform

Goal: customer convenience

Provide client more channels to access
Citibank and become flexible to meet
demand
Web-enabling current services
Build an infrastructure as a foundation
for all services (Citidirect- corporate
customers)

Regionalisation: consolidation of all data centers within

each country > move them to Singapore =
Centralization of data
Workflow automation: new systems to manage
automatic processing of transactions
Advantages of regionalized processing centers:
reduction cycle time transactions, secure databases,
minimize error rates and new efficiencies for customers
and employees.
Online and real-time processing> direct access to
information for customers and employees > efficient
working, cost savings, and comfort for customers.
USP: excellence in processing business > transparency
of the process for customers

Building a global infrastructure> deliver eproducts quicker and more efficiently.

Capability improvements in one region >
deploying in other regions.
Enhance system according to changing customers
needs.
Moving customers from using Old-style electronic
banking >> Citidirect (difficult process because of
customers security concerns) > slow in
introducing web-based applications > sol: educate
conservative customers

Formation Internet Operation Group: committee

charged with spreading responsibility for internet
activities

2 unites created (2000): E-consumer and E-Business

(aim: infuse internet into all consumer and corporate
banking activities)
Traditional Business Units formulating internet
strategies

Bringing people from business lines and internet side of

operations together = decentralized approach <>
centralized approach (Mr. John Reed, e-city)

Before 2000: aim to excel at all facets of ebusiness (software and systems development and
front end services) > failed strategy (client needs
and software technology changing)
2000: focus on alliances and use of partners
strengths (complementary technology,
infrastructure or access to markets)
Alliances: Oracle, Commertce One, SAP AG
2000: launch of Financialsettlement Matrix.com
(connect buyers and sellers in e-marketplaces with
payment processing, credit and other services)
Citibanks value in alliances: financial service
expertise, global presence, strong customer
relationships, trusted brand

Citibank

employed 268.000
employees across 100 countries
Citibank has implemented an
Embedded Bank strategy
Citibank behaved as local bank in
each country
Citibank set senior management from
countrys citizens

Citibank

had developed strong brand

recognition
Customers regarded Citibank as an
innovative , global bank offering
excellent customer service

Citibank is committed to hold position as a

premier supplier of cash management
Citibank investing heavily on technology
Citibanks main goal is to provide the most
cost effective , cutting edge, reliable and
secure solutions
Citibank see technology as their biggest
comparative advantage

The internet importantly affected banking

sector
Technology changed customer expectations
This improvements are challenges in
banking sectors
Citibank successfully responded to this
changes with ;
Web enabling Access points
Building a new global infrastructure
Integrating products in new ways