Overview of Citigroup Citigroup Citigroup is the renowned global financial services company with over 200 million-customer accounts in 104 countries across six continents. It is the first financial services company to bring together banking, insurance and investments under the same name. It provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. Citigroup, ranked one of the world’s 10 most respected companies, has the most diverse array of products and the greatest distribution capacity of any financial firm in the world. Citigroup generated revenues of $86.2 billion in 2004, which produced net income of $17 billion. The equity base increased 13 percent to $115.5 billion (including Trust Preferred Securities) and the balance sheet reached $1.5 trillion. It reported record net income for the first quarter of 2005 of $5.44 billion, or $1.04 per share, both increasing 3% from the first quarter of 2004. Globally, there were 300,000 employees in 2004. The major brand names under Citigroup's trademark red umbrella include Citi Cards, CitiFinancial, CitiMortgage, CitiInsurance, Primerica, Diners Club, Citigroup Asset Management, The Citigroup Private Bank, and CitiCapital. Citibank at Early Days Citibank was formerly (1967–74) known as First National City Corporation, American holding company incorporated in 1967, with the City Bank of New York, National Association (a bank tracing to 1812), as its principal subsidiary. The latter's name changed successively to First National City Bank in 1968 and to Citibank, N.A. (i.e., National Association), in 1976. Citicorp was the holding company's popular and trade name from its inception but became the legal name only in 1974. In 1811 the U.S. Congress refused to renew the charter of the First Bank of the United States, the country's central bank, which had branches in such Cities as New York. Thus on June 16, 1812, some of the First Bank's New York shareholders and other investors secured state incorporation of the City Bank of New York, which was later established in the branch banking rooms of the old First Bank. The bank grew as New York City became the nation's commercial and financial capital, and in 1865 it was chartered under the National Bank Act and renamed the National City Bank of New York. In 1897 it became the first large American bank to open a foreign department, and in 1915 it became America's leading international bank upon the purchase of International Banking Corporation (founded 1902), which had 21 overseas offices in 13 countries and territories. Other mergers and acquisitions in the United States and overseas expanded the bank. Notably, in 1931 it acquired the Bank of America, N.A. (another descendant of the First Bank of the United States and no relation to the California-based bank), and in 1955 it merged with the First National Bank of the City of New York (founded 1863).
Upon this latter merger, the consolidated company took the name of First National City Bank of New York. In 1967 the holding company Citicorp was created to hold the stock of the First National City Bank of New York—renamed City Bank of New York—and to hold the stock of subsidiaries to be newly acquired or split off from the bank, such as a finance company, a traveler's check company, and other related financial operations. The holding company setup improved the company's long-range conglomerating possibilities. In the late 1970s Citicorp pioneered the installation of a network of automated teller machines throughout its branch offices. The company secured an important share of the American credit card business by purchasing Carte Blanche Corporation in 1978 and Diners Club, Inc., in 1981. In 1982 and 1983 Citicorp made three major acquisitions—Fidelity Savings and Loan Association of San Francisco, First Federal Savings and Loan of Chicago, and New Biscayne Savings and Loan Association of Florida—which increased its assets by more than $8,500,000,000 and expanded its interstate banking operations significantly. By the late 20th century Citicorp was the largest American bank and one of the largest financial companies in the world, with about 3,000 branch offices worldwide. Formation of Citigroup The merger of Citicorp and the Travelers Group--creating Citigroup--combined for the first time in the U.S. a major banking organization and an insurance company. The merger took place in 1998 in response to the global financial crisis and intense efforts to prepare for the introduction of the European Union common currency (the euro) and industry wide consolidation both within and across national borders in order to reshape the financial services landscape. Before the merger took place in 1998, Citicorp had a number of organizations under it, of which, Citibank constituted of 90% of the business. Owing to a banking rule that not more than 10% of deposits can be invested in equity, Citibank was restricted in such ventures. Citibank Investment Limited was there for equity investments. Other than these, the group also included some other organizations: Citibank Overseas Software Limited, i-flex that served other than Citibank units, Citibanking Corporation etc. The CiticorpTravelers merger included one of the largest American investment banks, Salomon Smith Barney Inc. At the time of merger, it was not legally allowed that a bank and insurance company merges. The legal framework has changed now though and the entire merging process took one and a half years to smoothly take place. The transaction value for this was over US$140 billion. Citibank Citibank provides banking, lending and investment services to individual consumers, as well as small businesses with up to $10 million in annual sales. Citibanking North America delivers banking, lending, and investment services to customers through Citibank's Financial Centers and through electronic delivery systems. Specific products and services include basic banking accounts, investment services through Citicorp Investment Services, Citi Term® life insurance,
Citi Phone® banking, and Citi gold® accounts, which integrate banking, borrowing, and investing services. Client Financial Analysts are available at the bank’s Financial Centers and trained to use Citi pro® and Citi Business® Solutions Review – financial needs analysis tools that enable Citibank to bring tailored solutions to every customer. These tools allow bank’s analysts to assess customer needs and diagnose their financial situations. Japan is one region of three major Citigroup regions outside of the United States. Citigroup's (Japan) financial service network allows for customers to bank on a corporate, consumer, and private level, including global asset management, wholesale securities, and credit services. Consumer Bank operations in Western Europe provide banking, lending and investments services, including credit and charge cards, to customers across Europe, with continuous focus on the development of Internet banking and investments products. Emerging Markets Citigroup, principally through Citibank, provides financial services throughout the world – this includes 80 emerging market countries in Asia Pacific, Central and Eastern Europe, the Middle East and Africa (CEEMEA also includes Indian Subcontinent), Latin America and Mexico. The Emerging Markets (EM) brings together both consumer and corporate businesses, delivering a full range of banking services to corporations, financial institutions, the public sector, and individual customers. The customers are offered personal service and the advantages of a local bank, while the global platform continuously introduces a stream of new and innovative products quickly and more cost-effectively than the competitors. The EM has more than 90,000 employees around the world, providing services to 32 million customers and 10 million pension fund participants. Asia Pacific Extensive Asian branch network, with specialists and banking professionals who speak the local language, provides local and cross-border solutions and superior technology to customers with offices in the following countries:
Australia
Malaysia
Brunei
New Zealand
China
Philippines
Guam Hong Kong
Singapore Taiwan
Indonesia
Thailand
Korea
Vietnam
Macau CEEMA In CEEMA Citibank provides commercial, investment, and retail banking services, including credit and charge cards, to corporate, institutional, and consumer customers throughout the region. CEEMEA provides a variety of financial solutions—from the most basic cash and trade collection services through to complex regional treasury solutions. The countries under this region are: Algeria Angola Bahrain Bangladesh Bulgaria Cameroon Congo, Democratic Cote d'Ivoire Czech Republic Egypt
Gabon Ghana Hungary India Israel Jordan
Nepal Nigeria Oman Pakistan Poland Romania
South Africa Sri Lanka Tanzania Tunisia Turkey Uganda
Kazakhstan Kenya Lebanon Morocco
Russia Saudi Arabia Senegal Slovak
Ukraine UAE Zambia
Latin America Latin American offices of Citibank provide commercial, investment, and retail banking services, including credit and charge cards, to corporate and consumer customers throughout the region. Specialized retirement services are also provided within the Latin America and Mexico regions. Countries under this region are: Argentina Aruba Bahamas Barbados Bolivia Brazil Cayman Islands Chile Colombia Costa Rica Dominican Republic Ecuador El Salvador
Mexico
Guatemala Haiti Honduras Jamaica Panama Paraguay Peru Puerto Rico Trinidad and Tobago U.S. Virgin Islands Uruguay Venezuela
Citigroup acquired Banamex, the leading bank in Mexico in 2001. With this acquisition, Citibank has become the leading bank in Mexico in terms of corporate banking, retail banking, and issuing of credit cards. Citibank in Mexico provides a full range of services to both individuals and businesses, from bank accounts, loans and credit cards for consumers, to sophisticated corporate finance for corporations. Key services include: liquidity management, cross-border services (foreign exchange), trade services (documentary collections), trade finance, leasing/asset-based finance etc. Citibank N.A. Bangladesh Citibank N.A. started its operation in Bangladesh during 1987, by opening of a representative office. The main function of the bank at that time was limited to correspondent banking, L/C confirmation, and credit appraisal of companies for Citibank Hong Kong, Singapore, India etc. Based on the strengths with respect to global network, expertise in financial services and technology based delivery capabilities, Citibank N.A. Bangladesh had been able to establish as one of the largest overseas correspondents for the nationalized banks in Bangladesh. Full-fledged operation of Citibank started on June 24, 1995. Citibank N.A. is a 100% owned branch office of Citibank, New York. Then on June 18, 2000 a new full service branch was opened in Chittagong, the commercial capital of Bangladesh. The branch is now operating business in a commercial hub of the city side-by-side most of its other counterparts. A third branch of Citibank N.A. has started functioning Gulshan, Dhaka. In this very short span of time, and with limited human resource of 93 permanent employees, Citibank has been able to make a place for itself. In the year 2004, the bank’s net profit was Tk.38 corer. The operation of Citibank in Bangladesh is still conservative and limited to serving financial needs of the leading business and corporate houses (through treasury operations, cash management, lending etc) although the bank has a plan to go for consumer banking in near future. Bangladesh: As a Part of Citibank’s Global Market Citibank worldwide is structured in two divisions: GRB (Global Relationship Banking), which includes all the markets in the developed world and deals with those MNCs that are Citibank’s clients all over the world; and EM (Emerging Markets), which basically includes the markets in the developing world. Emerging Market is again divided into three geographic segments: Latin America, Asia Pacific and CEEMA (Central and Eastern Europe, Middle East and Africa). Bangladesh is one of 74 countries that fall under the head of Emerging Markets. Bangladesh belongs to the region, CEEMEA (Central Eastern Europe Middle East Africa), which includes 38 countries. In each of such regions, countries belong to different clusters; a cluster forms with 4/5 geographically close countries and the representative from the largest country in the cluster is chosen to be the Cluster Head. The cluster in which Bangladesh belongs to also includes India, Nepal, Sri Lanka and Bangladesh. The regional head office of Citibank N.A. Bangladesh is located at Mumbai, India. Structure of the Bank The bank is structured according to the four product divisions: Corporate Banking, Financial Institutions, Cash Management and Treasury. There are also four other departments that can be
termed as support and these are Operations, Credit Administration, Financial Control and Human Resource. Corporate Banking Corporate Banking in Citibank is divided into two main segments: GRB (Global Relationship Banking), in which the RMs basically deal with the clients (multinational companies in Bangladesh) with whom Citibank has global relationship. There is a single Parent Account Manager (PAM) in the country of origin of that MNC who is responsible for looking into the credit relationship between Citibank and the company worldwide. Any credit extended to the company has to be approved by the PAM. TTLC (Top Tier Local Corporate), as the name suggests is the segment in which only the top performers (basically the first three ranked companies) of any industry are approached to be Citibank’s clients. Citibank provides both deposit products and loan products to its corporate clients. The loan products are of varying tenor and purpose. Citibank N.A. Bangladesh also provides structured finance products. The main activities involved in Corporate Banking division of the bank include: communication with customers and calls. The RMs (Relationship Mangers) tries to establish contact with key CBG customers; know about the status of their capabilities. The next step is to collect customer information and make a detailed analysis of the needs of the client matched with what the bank can offer. After agreement of both parties, the bank gets approval from the lending unit. Once a company has become a client with credit relationship, the RMs then has to monitor the performance of the company and ensure that no classification of credit occurs. Every year, Citibank, Bangladesh has to submit to the cluster head the macro-economic indicators of the country and also the performance of the sub-sectors, and based on these, the portfolio is revised as to how much Citibank can get involved in each sector. Financial Institutions The Financial Institutions department caters for the need of various banks and non-bank financial institutions as well as NGOs, not-for-profit organizations and diplomatic missions. The core product is the correspondent banking services. Besides there are various electronic banking services, which enable FI, clients perform large domestic and international transactions efficiently and safely. With presence in more than 100 countries in the world, Citibank N.A. is one of the largest correspondent banks for international trade services. Citibank N.A. is one of the leading global correspondent banks of financial institutions operating in Bangladesh. The FI customers include the largest nationalized commercial banks, which account for approximately 50% share of the country’s financial market, as well as top tier private sector commercial banks. Primary Activities of FI & Trade Department
FI department mainly facilitates international trade conducted by Citibank N.A., Bangladesh. Citibank does L/C advising, confirming, transferring, granting and negotiating and reimbursing. In order to do so the FI department of the bank provides the local banks direct facilities or credit lines that includes OSTBT (Ordinary Short-term Banking Transaction), Local bill discounting, CTC credit line etc. Credit line for treasury purpose includes PSR facilities. Like the CBG Department, the FI-RMs also tries to establish contact with FI customers. After that, the RMs collects customer information and makes a detailed analysis of the needs of the client matched with what the bank can offer. After agreement of both parties, the bank gets approval from the lending unit. Cash Management Cash Management deals mainly with deposit collection i.e. is involved in liability management of the bank. For this, the team has to go out on calls to bring about customer deposits and get companies to open account with Citibank. Cash Management team works closely with the corporate division and with FI department (For NGOs, NBFIs, Insurance Companies and Diplomatic mission). The products and services offered from this department include: Online fund transfer between Dhaka and Chittagong. Efficient collection mechanisms at different outstation points. Secured electronic payment mechanism at over 100 locations across the country. Innovative and competitive deposit products. Web-based electronic banking services. Prompt distribution of inward remittance at competitive rates. Citibank is in a position to offer customized services with the help of state-of-the-art technology to support high volume of payments and collections. The Citibank product such as SAMBA enables effective payment in more than 40 currencies through drafts or wire transfers. Simultaneously, the strong relationships of Citibank N.A., Bangladesh with the nationalized commercial banks within the country enables payments to reach virtually to all the corners of Bangladesh. Trade &Treasury The treasury of Citibank Bangladesh meets all the foreign exchange related requirements of the valued corporate customers. Citibank Bangladesh Treasury has been giving excellent and innovative services to the clients since its inception in 1995. These clients can establish direct contact with the treasury for their foreign exchange requirements. Their local and global strength in treasury products enables them to offer the most competitive foreign exchange rates for Spot and Forward transactions. Apart from competitive foreign exchange rates Citibank has other value added treasury services: The products and services offered by this department include: Foreign Exchange Ready & Spot Forward Currency Swaps Deposits for Various Maturities
Bills Discounting Inter-bank Term Deposits Money Market Overnight Deposits Term Deposits Discounted Securities Citibank is also a very active player in the country’s Swap Market. They are always working very closely with Central Bank and other regulatory organizations to offer their local and international expertise for the development of new products and markets. Other Departments Credit Admin This department deals with credit risk or market risk of projects. Other responsibilities of the department include monitoring credit facility, checking the credit approvals prepared by the Relationship Managers, monitoring the Relationship Managers’ activities relating to plant visits. The Head of this unit reports to the Country Risk Manager (in case of Citibank, Bangladesh, it is the Chief Country Officer). Financial Control The activities of this department include managing the financial books of the bank; checking all entries of the book are according to standards, preparing daily reports for Bangladesh Bank, revenue appropriation and calculations, setting the internal pricing rates etc. Operations, Technology & ICU (Internal Control Unit) The Operations department of the bank deals with account opening, deposit management, loan booking, L/C opening etc; the Technology part involves processing of transactions and maintenance; and ICU is involved in reconciliation of Nostra accounts and also making sure that every day the suspense account balance is 0. Human Resource Department The responsibilities involved in the Human Resource department include recruitment, selection, employee performance evaluation etc. Being a multinational bank, besides Citigroup policies, certain US laws are applicable to the operation of Citibank in Bangladesh; anti money laundering and adhering to such general compliance issues of the bank are other major responsibilities of this department. Although compliance and human resource are two different sides, in Citibank Bangladesh, one individual heads both. Introduction of the report Customer relationship management (CRM) consists of the processes a company uses to track and organize its contacts with its current and prospective customers. According to one industry view, CRM consists of: Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team.
Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices). Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service. Providing employees with the information and processes necessary to know their customers, understand and identify customer needs and effectively build relationships between the company, its customer Customer Relationship Management (CRM) is one of the newest innovations in customer service today. CRM stands for customer relationship management and helps the management and customer service staffs cope with customer concerns and issues. CRM involves gathering a lot of data about the customer. The data is then used to facilitate customer service transactions by making the information needed to resolve the issue or concern readily available to those dealing with the customers. This results in more satisfied customers, a more profitable business and more resources available to the support staff. Furthermore, CRM systems are a great help to the management in deciding on the future course of the company. As mentioned, there is much data needed for the CRM system to work. These fields include the customer name, address, date of transactions, pending and finished transactions, issues and complaints, status of order, shipping and fulfillment dates, account information, demographic data and many more. This information is important in providing the customer the answer that he or she needs to resolve the issue without having to wait for a long time and without going to several departments. With just a few mouse clicks, a customer support representative for example can track the location of the customer’s package or order. This is infinitely better than the cumbersome process of tracking shipments previously. Furthermore, the customer service representative will also be able to see the previous concerns of the customer. This is a great help especially if the customer is calling about the same issue since he or she will not have to repeat the story all over again. This results in less time in resolving the issue, thus, higher productivity of the support staff. Customer Relationship Management systems are also important to the top management because it provides crucial data like customer satisfaction and efficiency of service by the frontline crews. A piece of customer relationship management software will also be able to generate the needed reports for product development or new concepts. Furthermore, this system will also be a great help for the top management in deciding the company’s future course of action, whether it involves phasing out one of the products on the shelves or making adjustments to one of the products sold. Successful integration of a CRM Customer Relationship Management system in the company, however, might not be as easy as it seems. The following might give an insight why CRM systems fail in some companies. Most companies fail to prepare for CRM systems. By this, it means that most companies fail to integrate all the departments that need to share the information for it to be effective.
Furthermore, CRM units scattered all over the company’s departments is often more effective than just making one big CRM department. This will ensure that each department will get the information and data that they need. CRM focuses on the relationship Successful organizations use three steps to build customer relationships: Determine mutually satisfying goals between organization and customers. Establish and maintain customer rapport. Produce positive feelings in the organization and the customers Why does the organization need CRM? The ultimate purpose of CRM, like any organizational initiative, is to increase profit. In the case of CRM this is achieved mainly by providing a better service to the customers than some other competitors. CRM not only improves the service to customers though; a good CRM capability will also reduce costs, wastage, and complaints. Effective CRM also reduces staff stress, because attrition - a major cause of stress - reduces as services and relationships improve. Good CRM also helps to grow the business: customers stay with the company longer; customer churn rates reduce; referrals to new customers increase from increasing numbers of satisfied customers; demand reduces on fire-fighting and trouble-shooting staff, and overall the organization's service flows and teams work more efficiently and more happily. Managing customers Managing customers entails: 1. Knowing what customers want and need - which enables the company to focus the company’s production and service efforts. 2. Knowing which products or customers have most growth potential - which enables the company to focus on developing highest potential. 3. Knowing which products or customers are most or least profitable - which enables the company to focus on maximizing profit. 4. Knowing which customers will be advocates and supporters - which enables the company to provide references, case studies, and to safely test new products and services People and CRM Successful and effective Customer Relationship Management people tend to display the following key characteristics: Positive attitude People orientation Organizational skills Analytical skills Customer focus (natural empathy) Understanding of the link between CRM and profitability
Benefits of effective CRM There are significant business benefits, which accrue from an effective, integrated Customer Relationship Management approach. These include: 1) Reduced costs, because the right things are being done (e.g. effective and efficient operation) 2) Increased customer satisfaction, because they are getting exactly what they want (e.g. exceeding expectations) 3) Ensuring that the focus of the organization is external. 4) Growth in numbers of customers. 5) Maximization of opportunities (e.g. increased services, referrals, etc.) 6) Increased access to a source of market and competitor information 7) Highlighting poor operational processes Challenges of CRM Exorbitant costs One of the problems with CRM is the huge investment needed to maintain a customer database. The additional expense comes because of the money needed for computer hardware, software; personnel etc. the costs involved are enormous and most often than not the resultant ROI from the CRM implementation fail to cover the cost involved. This leads to a negative feeling within the company about CRM and it’s so called success and ultimately results in CRM collapse. Inadequate focus on objective Secondly when starting off on a CRM strategy the objectives are clearly established and followed. Management and employees know fully well what is needed to work towards organizational goals. The goals themselves are clearly laid out after meticulous planning. However midway during the CRM implementation, when hard times hit, the organization loses sight of its goals and ultimately steers away from it. At times, goals get interchanged and lose their importance. Companies find themselves work at home directory towards goals that are less important and forgetting the ones that really are. This is one of the fundamental and mostly felt problems in CRM. Insufficient resources Sometimes in phased implementation of CRM, if conditions worsen within the company or without, organizations start lessening their budgets for the current phase. When funds are less, budgets strained, the necessary costs required for the CRM success are not employed. As a result CRM starts failing midway. The most important aspect- that of maintaining consistency is lost. Organizations fail to utilize the necessary resources for success and thus result in failure. Inappropriate metrics Organizations have basically failed to use the right metrics. Failure to choose the right method of measurement and implementation it is one of the chief reasons why CRM fails. Different metrics have to be employed for the calculation of different goals. Companies seldom pause to analyze
which metric is needed for which element and ultimately use the wrong one. This results in faulty measurement and CRM disappointments. Business needs most important One of the chief mistakes companies make is letting the technology drive their CRM functionality. What’s happening is that companies are endeavoring to go to the industry leaders, gain the technology needed and then apply it to the business problems first and then find the appropriate CRM solution for it. This backwards step is responsible for CRM failure. No customer focus Customer oriented strategy? Yes, CRM does play a part. Customer oriented employees? Now that requires an effort on the part of the organization. It needs to motivate employees to be absolutely customer centric. This involves tremendous effort on the part of the company but is highly essential. CRM problems arise because of employee reluctance to be more customers focused. The results are a highly expensive customer strategy being adopted by the company in an effort to retain customers, with reluctant, unfocussed employees implementing it. Slow returns Another failure of CRM is its inability to provide quick returns on investments. Organizations find themselves waiting for years before they are able to see actual returns on their investment. Most experts view the low ROI as a major problem with CRM but fail to see that the long wait is just as difficult. Waiting for years to see investments show results, tests patience and leads to both employees and management slackening their efforts in the implementation. Most CRM problems can be mitigated, resolved and ultimately obliterated. What is highly required is the ability to focus on the business needs, choose a CRM package that works towards it, employ the right resources and assume the right metrics. Adopting these measures would go a long way in alleviating CRM problems. Relationship value for customers A relationship value of a customer is a concept or calculation that looks at customers from the point of view of their lifetime revenue or profitability contributions to a company. This type of calculation is obviously needed when companies start thinking of building long term relationships with their customers. • Factors that influence relationship value The lifetime or relationship value of a customer is influenced by the length of an average ‘lifetimes’, the average revenues generated per relevant time period over the lifetime, sales of additional products and services over time, referrals generated, by the customer ever time, and costs associated with serving the customers. Lifetime value sometimes refers to lifetime revenue stream only. But most often when costs are considered, lifetime value truly means “lifetime profitability” •
Estimating customer lifetime value
If customers knew how much it really costs to lose a customer they would be able to accurately evaluate investments designed to retain customers. One way of documenting the dollar value of loyal customers is to estimate the increased value or profits that accrue for each additional customer who remains loyal to the company rather than defecting to the competition. Rationale of the study CRM is an essential ingredient in modern business management. Customers are the lifeblood of any organization, so it’s vital to understand what they need and provide the services they expect. The benefits of CRM, when implemented correctly, can be enormous. The study will find out how an effective CRM can help the organization.
Statement of the Problem This report I mainly focus on the customer relationship management of CITI BANK NA and how customer relationship manager handle their clients according to the customer needs. Scope of the Report The study would focus on the following areas of CITI BANK NA: FICC Operation (This is the Dept. where I am working now) FICC (fixed income currencies and commodities) operation FICC has two parts. 1.FICC/front officer 2. FICC operations/back officer FICC operation consists of the following things: Money Market (MM) operation I. Placement II. Borrowing III. T-bills FX operations I. Inter bank FX operations II. Customer FX operations Risks and Controls I. Limit monitoring II. Position and P&L Reconciliation Money Market (participants): I. Bangladesh Bank II. Commercial Bank III. NBFI’s (Non Banking Financial Institution) MM operations: I. Treasury bills
II. Term deposits III. Public sector bonds IV. Call money FX operations (participants) I. Bangladesh Bank II. Commercials Banks III. Corporate FX products I. IBFX II. CUFX Inter bank FX Other bank in the market with whom we deal is called the counter parties. Covers the banks position as well as take positions in the market. Deals are booked into e-dealer (front office system) Risks and controls 1) Daily risk report-TLR 2) Rate reasonability 3) Deal delay monitoring 4) Confirmations 5) Position reconciliation 6) Regulatory reporting (daily position, daily money market, daily FX report etc.) Rate Reasonability I. Highlight exception reports against deal rates II. Front office to sign off exception reports with satisfactory explanation for the same. III. Critical to ensure control. Deal delay: 1. Carried out for IBFX deals for any two random days in a week. 2. Compare blotter time with deal input time. Activities of FICC operations Sell and buy of different country’s currency. Sell and buy government bill like treasury bond, t-bill More than 1 year = t- bond Less than 1 year = t- bill Money market transaction is that market in which money can be borrowed / lended between two banks
FICC dealers deal with the banks for the money borrowing and lending. They are the front desk officers. According to the dealings, FICC operations teams involved in transaction processing and reporting. FICC operation team also does the payment check. Payment check means whether the receiving payment or giving payment is right or wrong. Another important tasks that FICC operations team is doing regularly that is BAFEDA reporting. In last day how many FX is done, in BAFEDA reporting there will be a list. Objective of the Study Primary objective: The primary objective of preparing this report is to represent the relationship of the customer management of CITI BANK NA and the procedure of dealings with the customers. Secondary objectives: a) Procedure of contact with corporate client b) Customer perception about Citibank NA c) Activities of relationship manager Client prospecting Client acquisition Client relationship Methodology The information for the Report “customer relationship management of CITI BANK NA will be collecting from primary and secondary sources. Primary Sources: For general concept development about the Customer Relationship Managers’ interviews and discussion session are taking as primary source. Secondary Sources: Most of the information of the report will be collected from secondary sources like• Relevant books • Various manual and customer relationship seminar • Realistic work and problem solving procedure of CITI BANK NA Analysis: According to the growth of deposit of Citibank NA, we can say that the amount of deposit is increasing day by day. That means the corporate customers of Citibank NA is so much convinced about Citibank that they don’t feel worry to deposit their money. The customer relationship managers of Citibank NA are quite capable enough to maintain the relationship with the corporate client. From the diagram we can say that in 2006, the total deposit was 21056936407. It is a big amount. In 2007, the deposit was 24655856231. So in one year the amount increased by almost 360 crore. It’s clearly suggests the customer satisfaction. In 2008 the deposit was 31502402835. The different between 2007 and 2008 is almost 2106 crore. Unless the customer is satisfied, they won’t keep this kind of huge money in Citibank NA. It also
indicates Citibank NA is secure enough and security is also an important part of customer satisfaction and customer satisfaction is always a vital part of customer relationship management.
Reference: Financial Statement of 2006-2008 According to the growth of investment, we can see that in every year the rate of investment is growing so fast the year 2007. The different between 2008 and 2006 is almost 362 crore. That’s the strength the Citibank has. It also means that the corporate customer of Citibank NA are satisfied enough to deposit their money. The bank always invests their money from the deposit, which is the corporate customer deposit. Investment always depends on deposit. Which bank has the higher amount of deposit that bank can invest more than other bank. And those two things ultimately depend on customer satisfaction that is lead by CRM. Growth of Investment (Citibank NA) 8000000000 6000000000 Tk 4000000000
2006 2007 2008
2000000000 0
2006
2007
2008
Year
Reference: Financial Statement of 2006-2008 As we can see that the growth of deposit and the growth of investment are increasing day-by-day ultimately it reflects the total assets of Citibank NA. From the amount of deposit a bank can invest their money in various sector and from the amount of investment, a bank can see the profits. So the total asset is totally depends on the amount of deposit and the amount of investment. In 2006 the total asset was 26140481108 and in 2007 it was like 31948552925. So in every year total asset is increasing. So if the customer of Citibank NA is not satisfied, it was not possible for them to gain this kind of huge asset.
Total Asset (Citibank NA) 40000000000
Tk
30000000000
2006 2007
20000000000 10000000000 0 2006
2007 Year
Reference: Financial Statement of 2006-2007 Procedure of contact with corporate client The customer relationship managers of Citibank NA are very much capable to contact with their client. As we know that the customers of Citibank NA are not the individual customers, all of them are corporate customers. So it is very difficult to handle them. The corporate customers of Citibank NA deal with a very big amount. So it is very obvious that the customer relationship manager need to convince them very carefully. There are some steps to manage the corporate customers. The most important thing is to prospect the client. That means choosing the right customer in the right time. If the customer relationship manager does a mistake to choose client then it will be very difficult to go the next step. In fact, if the client prospecting is incorrect then there is no meaning to go the next step. The next step is client acquisition. In this step the customer relation manager need to show his/her skill. In this step the customer relationship manager of Citibank NA try to find out what customers want and need - which enables the company to focus the company’s production and service efforts. They also want to know that which products or customers have most growth potential - which enables the company to focus on developing highest potential. Another important task what the customer relationship manager is doing to find out which products or customers are most or least profitable - which enables the company to focus on maximizing profit. Knowing which customers will be advocates and supporters - which enables the company to provide references, case studies, and to safely test new products and services is another important part of customer relationship manager. Last but not the least is to maintain the client relationship. That means the positive attitude; in case of any problems they should identify the problem and always try to help the honorable client. Customer perception about Citibank NA The corporate customer of Citibank NA has a very good perception about Citibank NA. It reflected on their growth of deposit. The amount of deposit is increasing day by day. That means the corporate customers of Citibank NA is so much convinced about Citibank that they don’t feel worry to deposit their money. The customer relationship managers of Citibank NA are
quite capable enough to maintain the relationship with the corporate client. On the other hand, growth of investment is also very impressive. That also means the customer satisfaction. Activities of relationship manager In fact the activities customer relationship manager of Citibank NA can be divided into three parts. 1) Client prospecting 2) client acquisition 3) client relationship maintains. 1) Client prospecting: The most important thing is to prospect the client. That means choosing the right customer in the right time. If the customer relationship manager does a mistake to choose client then it will be very difficult to go the next step. In fact, if the client prospecting is incorrect then there is no meaning to go the next step. In client prospecting, the customer relationship manager want to know that which products or customers have most growth potential - which enables the company to focus on developing highest potential. Another important task what the customer relationship manager is doing to find out which products or customers are most or least profitable which enables the company to focus on maximizing profit. 2) Client acquisition: The next step is client acquisition. In this step the customer relation manager need to show his/her skill. Among the various clients, the customer relationship manager needs to choose the right client. That is the client acquisition. If the client prospecting is a good one then ultimately client acquisition will be the best one. 3) Client relationship maintain: Last but not the least is to maintain the client relationship. That means the positive attitude; in case of any problems customer relationship manager of Citibank NA try their level best to identify the problem and always try to help their honorable client. Findings 1. (Investment & deposit) ultimately depends on customer satisfaction that is lead by CRM. That is one of the main strength of Citibank NA has. 2. According to the growth of investment, we can see that in every year the rate of investment is growing so fast. That’s the strength the Citibank has. It also means that the corporate customer of Citibank NA are satisfied enough to deposit their money. 3. After launching Citi’s activities in Bangladesh, this bank is trying to serve the Bangladeshi Customers according to the global standard. For that reason, customers are highly interested to deposit their money in this Bank and based on that, Bank can also invest that money to the other sectors. According to the growth of deposit of Citibank NA, we can say that the amount of deposit is increasing day by day. That means the corporate customers of Citibank NA is so much convinced about Citibank that they don’t feel worry to deposit their money. 4. Investment always depends on deposit. Which bank has the higher amount of deposit that bank can invest more than other banks. And those two things (investment & deposit) of Citibank NA are quite superior compare to other bank. 5. Because of the growth of deposit and the growth of investment are increasing day-by-day ultimately it reflects the total assets of Citibank NA. In 2006 and in 2007 Citibank NA gain a huge profit. If their customer is not satisfied, it would not possible for them to acquire this kind of huge profits.
6. It can say that Citibank NA is one of the best banks in the world. So people are very much convinced about the security issue. 7. In client prospecting, the customer relationship manager of Citibank NA want to know that which products or customers have most growth potential - which enables the company to focus on developing highest potential. Another important task what the customer relationship manager is doing to find out which products or customers are most or least profitable - which enables the company to focus on maximizing profit. 8. In the client acquisition step, the customer relation manager needs to show his/her skills. Among the various clients, the customer relationship manager chooses the right client. 9. Last but not the least is to maintain the client relationship. That means the positive attitude; in case of any problems customer relationship manager of Citibank NA try their level best to identify the problem and always try to help their honorable client. 10. The importance of customer satisfaction survey cannot be underestimated. After all, customer satisfaction can impact every aspect of your business from earnings to stock profits. That is why customer satisfaction survey is very important. Customer satisfaction survey measure and evaluate the attitudes, opinions and satisfaction levels of the customer and clients. Citibank NA conduct customer satisfaction survey once in a year. 11. The customer satisfaction survey of Citibank NA is conducting from Singapore. A renowned company called R+ is responsible for doing this survey. It’s totally based on online survey. 12. Customer database software allows managing and using an incredible variety of information easily. Database are easy to set-up, easy to manipulate and easy to use. A database allows maintaining order in what could be a very chaotic environment. Citibank NA uses the software that is called PRPC (pega rules processing center). 13. The customer retention rate refers to the number of customers lost over a period of time. It is normally calculated by the percentage of lost customers versus existing customers over a quarterly or annual period, without tallying new customer acquisition. There are obvious benefits to keep customer loyal and maintaining high customer retention rate. Customer relationship manager of Citibank NA goes directly to the customers and try to identify the reason to gather information about difficulties. 14. In a retention program, another important task Citibank NA is doing is service review. In this case, customer relationship managers want to find out what is the reason of customer lost and in the meantime they try their level best to improve that particular service. 15. Customer loyalty is the key to the success of an organization, and is fostered when an organization excels along two dimensions: many company focus on rewarding who have repeat purchases. Such reward programs have their place in assuring customer loyalty. However, if the product or service does not meet customer needs, no reward program will keep them returning. For success in the long run, an organization must maintain loyalty program. Citibank NA divided their customers into three parts. The most important is the platinum customers. The bank remains always ready to serve them first. Then come the premier customers. They are second priority. The last one is a preferred customer. Citibank NA provides discount for loyal customers according to the above segmentation. 16. Citibank NA follows effective CRM program. Calendar distribution, dairy distribution, family party, gift distribution, service quality, team effort are some of the CRM program.
Suggestions 1. To be successful, organization must look into the needs and wants of their customers. That is the reason why many researchers have continuously emphasized on the importance of customer satisfaction. Citibank NA should improve the overall customer satisfaction by maintaining better relationship with customers and clients. 2. The importance of customer satisfaction cannot be underestimated. After all, customer satisfaction can impact every aspect of your business from earnings to stock profits. Citibank NA is practicing customer satisfaction survey once in a year. They should maintain twice in a year to get a better feedback from customer viewpoint. 3. As we see that, customer satisfaction survey conducts from Singapore only. But it should be conducts regionally at least twice in a year. 4. Citibank NA should introduce loyalty card to repeated buyers. 5. In loyalty program, Citibank NA should emphasis equally to their clients. The bank always gives importance to its platinum clients. But the premier and preferred clients also should be observed equally. 6. Citibank NA should offer employee benefits (e.g. discount, loan benefit etc) to make satisfied their internal customers. Because if internal customers remain satisfied then they will be motivated to deliver better service to customers. 7. Citibank NA should maintain at least two customer database softwares so that they should call customers for their preferences. 8. Citibank NA should introduce superior call randomly to ensure customer visit by customer relationship manager. 9. They can also introduce team effort to build up better customer relationship. 10. The most important aspect of CRM problems is its excellent ability to achieve customer retention. That’s why Citibank should follow Quick Response (QR). 11. The customer gap is the differences between customer expectation and perception. Though the service failure of Citibank is very much rear, but if the service failure occurs then the customer relationship manager of Citibank NA should try to find out the reason of service failure and take actions according to the problem. 12. The new entrants are trying to take strong position in the market and that is creating other potential entrants to walk in the market. Citibank NA needs to think about the new entrants and improve their CRM policy. 13. In order to know CRM work, all the relevant people in the business must know what the information they need and how to use it. 14. Weak leadership can cause problems for any CRM implementation. If a proposed plan is not right for any company, don’t need to do it. Send the teams back to the drawing board to come up with a solution that works. So Citibank NA should try to reach the maximum quality that a customer relationship manager must need to have. Conclusion Citibank N.A. started its operation in Bangladesh during 1987, by opening of a representative office. The main function of the bank at that time was limited to correspondent banking, L/C
confirmation, and credit appraisal of companies for Citibank Hong Kong, Singapore, India etc. Based on the strengths with respect to global network, expertise in financial services and technology based delivery capabilities, Citibank N.A. Bangladesh had been able to establish as one of the largest overseas correspondents for the nationalized banks in Bangladesh. The corporate customer of Citibank NA has a very good perception about Citibank NA. It reflected on their growth of deposit. The amount of deposit is increasing day by day. That means the corporate customers of Citibank NA is so much convinced about Citibank that they don’t feel worry to deposit their money. The customer relationship managers of Citibank NA are quite capable enough to maintain the relationship with the corporate client. On the other hand, growth of investment is also very impressive. That also means the customer satisfaction. Because of the growth of deposit and the growth of investment are increasing day-by-day ultimately it reflects the total assets of Citibank NA. In 2006 and in 2007 Citibank NA gain a huge profit. If their customer is not satisfied, it would not possible for them to acquire this kind of huge profits. To be successful, organization must look into the needs and wants of their customers. That is the reason why many researchers have continuously emphasized on the importance of customer satisfaction. Citibank NA should improve the overall customer satisfaction by maintaining better relationship with customers and clients. The new entrants are trying to take strong position in the market and that is creating other potential entrants to walk in the market. Citibank NA needs to think about the new entrants and improve their CRM policy. Bibliography Valarie A. Zeithaml, Mary jo bitner (2007-08), “Service Marketing”, 4 th Edition, Tata Mcgraw Hill Edition. Philip kotler, Marketing Management, the Millennium Edition, Prentice Hall India. Del I Hawkins, Rojer J. Best, Kenneth A. coney; Consumer Behavior, 9 th Edition, Tata Mcgraw Hill Subject related Lectures Journal Website of Citibank NA Information from office Appendices 1) FX………………………….Foreign Exchange. 2) MM………………………...Money Market. 3) PRPC……………………… Pega Rules Processing Center. 4) R+………………………….A Name of a Company. 5) QR………………………….Quick Response. 6) FICC………………………..Fixed Income Currencies and Commodities. 7) NBFI………………………..Non Banking Financial Institution. 8) T-BILL……………………...Treasury bill. 9) T-BOND……………………Treasury Bond 10) ICU………………………….Internal Control Unit. 11) BAFEDA……………………Bangladesh foreign exchange dealer association. 12) TLR………………………….Treasury Limit Report.