Citibank Case
Case 6: CitiBank
1. On a social standpoint, CitiBank is faced with more of their customers expanding their businesses globally and becoming e-enabled. Hence, CitiBank had to adapt to this new social trend by shifting to e-space. For instance, sophisticated, corporate customers wanted to collect payments online and have access to more efficient Web-enabled financial processes. Politically, regulators who became more cautious about privacy issues and wanted banks to be able to quickly identify data breaches in order to limit any damage as a result of fraud affected CitiBank. The subprime mortgages crisis in October 2007 affected CitiBank as Citigroup incurred losses of $9.83 billion for the last quarter of 2007. The ever-changing global economy encourages CitiBank to be more innovative to respond to new trends and customers’ needs. It is an era of tough competition in which CitiBank has the duty to find ways to always increase operating efficiency while maintaining or even improving services to customers. There is a rapid change in technology that requires CitiBank to respond to new customers’ demand. For instance, businesses demanded electronic invoicing, automatic application of payments to accounts receivable and online payment guarantees. Due to the tough competition environment, if CitiBank is not able to provide such services, other banks could steal their customers. The Internet is probably the most important feature in the banking industry. Customers now prefer to run their transactions online because it is more efficient and less time consuming. CitiBank knew that this was vital to their success, and their vision was to become the world’s leading e-business enabler. Indeed, technology investments in the global financial service industry were growing at a rate of 4.2% per year. CitiBank then implement an e-business strategy to deliver on its vision.
2. There are barriers to new entrants in the financial services industry, especially on the global
1. On a social standpoint, CitiBank is faced with more of their customers expanding their businesses globally and becoming e-enabled. Hence, CitiBank had to adapt to this new social trend by shifting to e-space. For instance, sophisticated, corporate customers wanted to collect payments online and have access to more efficient Web-enabled financial processes. Politically, regulators who became more cautious about privacy issues and wanted banks to be able to quickly identify data breaches in order to limit any damage as a result of fraud affected CitiBank. The subprime mortgages crisis in October 2007 affected CitiBank as Citigroup incurred losses of $9.83 billion for the last quarter of 2007. The ever-changing global economy encourages CitiBank to be more innovative to respond to new trends and customers’ needs. It is an era of tough competition in which CitiBank has the duty to find ways to always increase operating efficiency while maintaining or even improving services to customers. There is a rapid change in technology that requires CitiBank to respond to new customers’ demand. For instance, businesses demanded electronic invoicing, automatic application of payments to accounts receivable and online payment guarantees. Due to the tough competition environment, if CitiBank is not able to provide such services, other banks could steal their customers. The Internet is probably the most important feature in the banking industry. Customers now prefer to run their transactions online because it is more efficient and less time consuming. CitiBank knew that this was vital to their success, and their vision was to become the world’s leading e-business enabler. Indeed, technology investments in the global financial service industry were growing at a rate of 4.2% per year. CitiBank then implement an e-business strategy to deliver on its vision.
2. There are barriers to new entrants in the financial services industry, especially on the global