Citibank Case Analysis

HKU197
06/07/02

Citibank’s e-Business Strategy for Global
Corporate Banking
Citibank’s Global Cash and Trade division was in the business of managing the flow of
money for its corporate customers. It provided the tools and channels for its customers to
receive money efficiently and to make payment in a timely fashion. In 2000, intense
competition and the dot com boom put pressure onCitibank and its competitors to transform
their business in the new economy. In response to these challenges, Citibank made a serious
push to deliver integrated solutions that would enable its corporate customers to conduct
transactions on-line. Citibank’s e-business strategy – Connect, Transform and Extend – was
to Web-enable its core services, develop integrated solutions, and reach new markets.The
ultimate goal was to build a single Web-enabled platform for all customers with similar
needs.
To transform its Global Cash and Trade Division into an e-business, Citibank faced
challenges in serving its corporate customers who had discrepant needs. Sophisticated
clients, such as multinational companies (MNCs), required custom-built host-to-host product
interface. Other customers, suchas the small-and-medium-sized enterprises (SMEs), were
more conservative and were not ready for web-based solutions. How could Citibank build a
flexible and agile e-business product that could capture their total cash management & trade
service needs? Given Citibank’s enormous global reach, how could it integrate the Internet
initiatives into its overall strategy and create sustainablecompetitive advantages?

Global Corporate Banking at Citibank1
Citibank was incorporated in 1812 under the name of City Bank of New York. The bank had
experienced several mergers since inception. The name Citibank N.A. was adopted in 1976.
Following the merger with Travellers Group in 1998, the holding company changed its name
to Citigroup Inc. In 2001, the Group employed 268,000 staff across over100 countries
serving 192 million customers.

1

Baron, D. and Besanko, D. (2001), “Strategy, Organization and Incentives: Global Corporate Banking at Citibank,” Industrial
and Corporate Change, 10(1), pp. 12-14.

Marissa McCauley prepared this case in conjunction with Shamza Khan under the supervision of Prof. Julie H. Yu
and Dr. Ali Farhoomand for class discussion. This case is notintended to show effective or ineffective handling of
decision or business processes.
This case is part of a project funded by a teaching development grant from the University Grants Committee
(UGC) of Hong Kong.
© 2002 by The Centre for Asian Business Cases, The University of Hong Kong. No part of this publication may be
reproduced or transmitted in any form or by any means - electronic,mechanical, photocopying, recording, or
otherwise (including the Internet) - without the permission of The University of Hong Kong.
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7 June, 2002

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Citibank’s e-Business Strategy for Global Corporate Banking

Since the 1990s, Citibank’s corporate banking activities evolved from a highly decentralised
set of operation to a more centralised one, with much attentionfocused on 1,400 large global
corporations and institutional investors. By 1997, Citibank was one of the most profitable
banks in the US. Its profits in 1997 were US$3.59 billion, with global corporate banking
accounting for US$2.56 billion. By most measures, Citibank was the most global US bank.
For corporate customers, Citibank traditionally provided a full range of financial services,
exceptfor investment banking services in the US. The core products were broadly grouped
into three categories:
1. Transaction services – such as cash management, trade and custody services
2. Corporate finance services – such as working capital finance, trade finance and
asset-based financing
3. Treasury market services – such as hedging and foreign exchange
Citibank’s Cash Management and Trade...