E-business enabler: Citigroup

Global Finance, Summer 2001

Citigroup, a global financial services company with 120 million customers and 8.3 million online accounts, had net assets of $902 billion at the end of 2000. The company's three main business areas are global corporate and investment banking (brokerage, banking, and financial planning to corporate clients through subsidiary Salomon Smith Barney); retail banking (credit cards, investment services, and insurance); and global investment management and private banking (asset management for corporate and private clients).

In 2000, consumer activities represented the bank's main business (44% of income), followed by corporate and investment banking (42%). Geographically, North America contributes the largest share of revenue (64%), followed by Asia (9%) and Latin America (8%).

Citigroup includes Citibank, Salomon Smith Barney, Travelers Insurance, CitiFinancial, and Primerica Financial Services. Citigroup recently completed the acquisition of Associates First Capital, the largest consumer finance company in the United States, and also acquired New York-- based European American Bank from ABN Amro for $1.6 billion.

Citibank has established its brand on the Web through several Web sites and services such as person-to-person payments and aggregation services. Citibank also offers online services and new products to retail clients, making it one of the most recognized retail online banking providers in the world.

On the corporate side CitiDirect Online Banking serves 87 of the

102 countries where Citibank is active. CitiDirect offers secure Internet-based banking with which clients can access payments, information reporting, trade finance, WorldLink multicurrency payments service, and netting services.

In the past year and a half, the bank has invested considerable effort to extend e-finance activities for the corporate world. "Our mission is to be the leading e-business enabler, not only the financial engine behind many transactions taking place on the Web," explains Ann Cairns, global e-solutions head for Citibank e-Business. "Our aim is to connect our customers, transform their business, and extend into new markets with innovative e-commerce solutions."

CONSUMER E-SERVICES

The main portal to Citibank online is www.citibank.com. This site provides access to Citibankonline, offering 8.2 million online customers standard Internet banking services such as account lookup, funds transfer, and bill payment. No subscription fee is required.

Cititrade.com, the basic brokerage account, allows individuals to trade stocks, bonds, treasuries, and mutual funds online, and offers financial news and research reports. More sophisticated tools are provided to subscribers of the online brokerage services of subsidiary Salomon Smith Barney

(www.salomonsmithbarney.com), which had 1.7 million subscribers at the end of 2000.

Citibank offers an online credit card account that offers account information, bill presentment, applications, and balances to more than 3 million customers.

In the second half of 2000, Citibank signed a multiyear alliance with America Online to offer new payment and money transfer features across AOL's Internet site. Under the partnership Citibank is a preferred provider of financial services. C2it, the first result of that agreement, is a person-to-person (P2P) payment solution that allows any US-based individual to transfer money from any credit card, checking, savings, or brokerage account to any person who has an e-mail account. This solution is offered under the brand AOL Quick Cash to AOL's 28 million subscribers. In addition, Citibank launched clickcredit.com, a virtual credit card for online shoppers to complete secure online purchases.

Bizzed.com is a small-business portal that offers a comprehensive package of services to companies, from payroll processing to merchant credit accounts, many of them provided by Citigroup companies. Bizzed.com, powered by Yodlee, also offers an aggregation of accounts for business clients.

Through the site myciti.com, Citibank offers an aggregation of online accounts, provided by Yodlee's back-end infrastructure. With myciti a customer can view savings, checking, brokerage, credit card, airline premium, and e-mail accounts on one page. The service, launched in July 200o, had attracted only 50,000 subscribers by October, testifying to the resistance of people to reveal all of their personal banking information on a single site. However, Citibank, like many of its competitors, believes that over the long term, aggregation will present a strong case for customer loyalty and cross-selling and that bill payment through mycity.com will open an opportunity to sell other financial products.

Citibank's e-Citi division has licensed Corillian's Voyager eFinance suite to support consumers who conduct Internet banking transactions via certified Open Financial Exchanges (OFX) products. "Corillian's Voyager platform enables us to easily add OFX transaction capability to our Direct Access online banking system around the world," says Don Eichenseer, director of global online banking at e-Citi.