CITIBANK’S E-BUSINESS STRATEGY FOR
GLOBAL CORPORATE BANKING (2008)
In 2000, in response to intense competition and the dotcom boom, Citibank made a serious push to deliver integrated solutions that enabled its corporate customers to conduct business online. Citibank’s e-business strategy (“connect, transform and extend”) was to web-enable its core services, develop integrated solutions and reach new markets. Citibank aimed to build a single web-enabled platform for all customers with similar needs. Following the success of CitiDirect, a corporate banking platform which was developed in 2000 and strengthened in 2003, Citibank started to develop TreasuryVision as a replacement to suit the changing marketplace.
When developing its e-business, Citibank faced constant challenges in serving corporate customers with diverse needs. Sophisticated clients, such as multinational companies (“MNCs”), required custom-built host-to-host product interfaces. Other customers, such as small- and medium-sized enterprises (“SMEs”), were more conservative and were not ready for web-based solutions. Meanwhile, Citibank was under increasing pressure to cut costs and improve efficiency. Especially following the outcry over subprime mortgages in October 2007, Citibank had to face a very tough business environment. How could Citibank build a flexible and agile e-business product that could capture its clients’ total cash-management and trade-service needs? Meanwhile, how could Citibank use its e-business strategy to lower costs and improve efficiency? Given Citibank’s enormous global reach, how could it integrate internet initiatives into its overall strategy and create sustainable competitive advantages?
Global Corporate Banking at Citibank
Citibank was incorporated in 1812 as City Bank of New York. The bank experienced several mergers after its inception. The name Citibank N.A. was adopted in 1976. Following its merger with Travellers Group in 1998, the holding company changed its name to Citigroup Dr Minyi Huang prepared this updated version of the case with the same title published in 2001 under the supervision of Professor Julie H. Yu and Professor Ali Farhoomand for class discussion. This case is not intended to show effective or ineffective handling of decision or business processes.
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Citibank’s e-Business Strategy for Global Corporate Banking (2008)
Inc (“Citigroup”). In 2006, Citigroup employed 325,000 staff serving 200 million customers in over 100 countries and had an information technology (“IT”) expenditure of US$3,762 million.
Starting in the 1990s, Citibank’s corporate banking activities evolved from a highly decentralised set of operations to becoming more centralised, with much attention focused on 1,400 large global corporations and institutional investors. 1 Starting in the mid-1990s, Citibank transformed from a geography-based organisation into a multi-dimensional one with the geography factor significantly de-emphasised. Customer needs became its first priority, while product types were given second priority.2
By most measures, Citibank was the most global US bank. In 1997, Citibank became one of the most profitable banks in the US, with the annual profit of US$3.59 billion, of which global corporate banking accounted for US$2.56 billion. Citibank’s global corporate banking business continued its healthy growth. The bank’s Cash and Trade service was a core product offered to corporate customers. By 2000, Citibank’s Cash and Trade division had already exceeded US$1 trillion in financial transactions...