A Case Study: Citi-bank Asia-Pacific

Agenda

• Background

• Problems

• Strategies

• Implementation

• Conclusion

Background

• Large third-world loan portfolio

• Commercial property loans

• Slowdown in revenue growth

Vision

• Meeting customers needs

• Having financial strength

• Marshalling human and technological resource more imaginatively and cost-effectively than competitors

Strength

• Global presence—network banks in more than 90 countries.

• Growing overseas consumer banking

Status in 1991

• Asia +400 millions

• US –894 millions

• Europe, Africa, and the Middle East +132 millions

Asia growth

• Consumer deposits 13.6 billion (6 times growth 1983-1992)

• Loans 10.3 billion (7 times growth 1983-1992)

Asia divisions

• North: Korea, Taiwan, Hong Kong, and the Philippines.

• South: Thailand, Malaysia, Singapore, Indonesia, and Australia.

• Central Europe/Middle Eastern: India, Pakistan, Saudi Arabia, United Arab Emirates, and Eastern Europe.

• Continuing growth in the consumer banking area through global expansion and leveraging IT.

• Serving customers anywhere, anytime with the same high standard of service that they receive in their home countries.

Changes

Problems• Each country has its own IT infrastructure

and unique applications.• Hard to integrate products, services, and

information to serve the highly sophisticated, mobile, and increasing demanding global customers.

• The economic reason for standardizing and consolidating bank products and processing across the diverse countries.

System Environment

Platform:• MVS• AS/400• UNIX

Applications:

COSMOS

CORE

The systems were modified because of different regulations and requirements in different countries.

Strategies1. Re-architect the IT infrastructure by

standardizing and centralizing all back office banking functions.

2. Develop center of excellence by encouraging individual countries to take the lead in developing product and process where they have significant leadership and competitive advantages in the marketplace.

3. The systems, products, and processes must meet the requirements for all countries in the region and have full support from the original developers.

Implementation of RCC

• Regional Card Center (RCC) in Singapore as a prototype for consolidation.

• Jump-start credit card business in the southeastern Asia.

• Combine centralization and decentralization idea to meet specific local business needs and low cost of processing at the same time.

Effects of the implementation

• By 1990, having reduced the processing cost per credit card by 45%.

• 1994, cost was down to 32% of the 1989 cost.• 1996, processing in 15 countries, and 5

million from 230,000. • 3 months to launch a new business instead of

previous 14 months. • Devote resources to other services• Recruit and retain talent from the best in the

region.

Re-architect the infrastructure

• Centralization of computing

• Centralization of software development

• Choose Systematics and change it.

• Convert other programs to Systematics.

• Increase programming productivity and reduce staff.

• Setup the backup site.

Building Common Front-end Systems

• Build the case for action

• Design

• Implementation

Management Success Factors

• George DiNardo’s leadership.

• Vision

• Implementation Strategies

• Top Management’s supports.

• Strong team

Remaining Issues

• Conversion may surface unexpected technical problems.

• What if DiNardo retires.

• High level of operation complexity presents challenges in maintaining availability, reliability, and quick response time.