Citibank’s E-Business Strategy for Global Corporate Banking

Citibank is an international bank that was founded in 1812 by a group of New York merchants. Currently it is the largest retail bank in the United States and has also been cited as one of the world’s largest banks with numerous branches all over the world. The bank is currently headed by Vikram Pandit as the Chief executive and William Rhodes as the chairman. Citibank exists to offer clients with unmatched needs through the provision of standard banking transactions, insurance, investment products and credit card services. Citibank is one of the fast few financial institutions to introduce online banking services. Right now its online business has a client base of about 15 million subscribers. (Walter, 1996)

Citibank is one of the banks that were targeted by the recent United States Cash bail out. This was as a result of the prevailing current global financial and economic crisis, emerging the biggest beneficiary with $25billion boost. Citibank’s strategy remains creativity and good financial management. It also relies on mergers and acquisition of new branches. (Shapiro & Varian, 1999)

How Citibank differentiates its e-business product offering from its competitors and create its own competitive advantage

Before the introduction of the automatic teller machines, Citibank was already using the citicard that allowed its clients to carry out all transactions without a passbook. During this period this feature could only be found at Citibank. This implied that the bank had begun harvesting on technology when it was still dark for its competitors. Then at the same time its branches also had terminals with simple one line displays that allowed customers to obtain basic account information without a bank teller. This provided customers with a lot of conveniences while at the same time helping the bank to reduce its operational costs by employing less staff within one line of business. Just like Porter puts it, strategy is about performing the same activities as your competitors but in a better way and at lower costs than your competitors. This saw the prosperity of Citibank in the midst of its competitors. (Rangan & Adner, 2001)

As time matured, Citibank saw it wise to enter into an agreement with the credit card business. This led to the creation of the Everything card that was later turned into Choice card. With continued technological innovation, the choice card was disbanded. These cards were produced by four banks jointly but were only issued at Citibank. The cards allowed customers to withdraw money and perform other transactions in any bank across the United States. This meant that Citibank could levy a charge on these banks and consequently led to its further financial progress. (Shapiro & Varian, 1999)

Citibank could as well use its industry and technological strength to provide financial mortgages at lower rates than its competitors. This would attract those who are thinking of real estate investment. By providing better financial mortgages at rates lower than its competitors in the industry, it would add to its existing internal efficiencies to establish unbreakable barriers in the industry. (Tallman & Fladmoe-Lindquist, 2002)

How Citibank transforms its traditional assets into digital assets

Due to the intense competition in the industry, Citibank has embarked on a strategy that includes the conversion of its traditional banking system to incorporate the modern software banking technology. This feature serves to distinguish the Citibank from its ace competitors by providing strategic and competitive advantages. Currently Citibank is using internet banking technology in order to create sustainable competitive advantages. Through this system Citibank is able to reach and monitor all its clients and branches overseas. The internet banking has also provided Citibank to reduce its operational costs overtime. (Walter, 1996)

The company is currently evaluating a proposal to convert its traditional cash system into electronic payment. This is believed to provide its customers with a great convenience by restricting their movement as they can make payment through debit and credit cards anywhere. Though domestic and international competition seem to sour, Citibank has a strategy of connecting, transforming and extending technology. This has made it to be very responsive to competitive pressures. Issues associated with these technologies include over-expansion, securities, non-compliance, and liquidity issues. Citibank is using different financial experts to help them manage risks. However care should be taken to ensure that the group does not suffer from adverse liquidity and profitability ratios. (Rangan & Adner, 2001)


Andal-Ancion, A, Cartwright, P. A., & Yip, G. S. (2003). Businesses. MIT Sloan Management Review, 44(4).34-41

McCauley, M & Khan, S. (2002). Citibank’s e-Business Strategy for Global Corporate Banking. Harvard Business School Press.

Rangan, S., & Adner, R. (2001). Profits and the Internet: Seven misconceptions. Sloan Management Review, 42(4).

Shapiro, C., & Varian, H.R. (1999). The art of standards wars. California Management Review, 41(2).

Tallman, S., & Fladmoe-Lindquist, K. (2002). Internationalization, globalization, and capability-based strategy. California Management Review, 45(1).

Walter, W. (1996). Citibank, and the Rise and Fall of American Financial Supremacy. Phillip L. Zweig, New York.

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