group 13_ sec f_does it payoff strategies of two banks

8/13/2019 Group 13_ Sec F_Does It Payoff Strategies of Two Banks

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Case Analysis : Strategies of Two BankGiants

Submitted By :

Group No: 13

Amit Maheshwari2012PGP032

Chandan Nikhil K2012PGP092

Meghwant Singh Thakur

2012P

Niyati Jhunjhunwala2012PGP2

Pankaj Dhingra2012PGP240

Vikalp Kumar Nigam2012PGP4


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Q1 Information technology used in both the banks is customized to a

objectives. They incorporate lots of modifications into their softwareneeds thereby bringing about differentiation between them

Since IT was being commoditized, IT based competitive advantages wdisappearing. However, both the banks heavily customized IT to suitand integrated them in to there day to day processes like finance and o

They used IT to diversify their business thereby reducing risks. Chawas heavily into e-trading. By leveraging on IT, both Citibank & HSBto provide e-trading

Internet banking system has a direct impact on cost savings i.e., transare much reduced as compared to the traditional banking systemCitigroup was able to increase its online accounts to 800 Million inCitigroup was able to mobilize $10 billion of deposits through its e

HSBC doubled its e-banking customers to 3 Million


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Q2The purpose of their IT investments are as follows:

To increase their global reach and penetrate new markets

To provide better customer services such as the online payment optionreduced the hassles of going to the banks for day-to-day transactions

To diversify their businesses :

HSBC started the online portal in conjunction with Merrill Lyprovide brokering services

The credit card payment option on the refurbished online port

provided a credit opportunity & acted as a stimulus to increasepayments through this option

Citibank called this- Diversified Financial Services Business

Citigroup followed an integrated approach to their IT governance wor

They used the IT capabilities for the analytics purpose. The data collevarious transactions was stored in a warehouse and relevant slicing/di

done


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They also used it to achieve their long term strategic goals

HSBC primarily used IT for operational efficiency

HSBC used IT for cost cutting through outsourcing. Cost cutting resulteestimated savings of $30 million in a year

HSBCs strategic investments came through JVs across various domaincommerce projects, broking, electronic wallet

Citigroups approach incorporated a group-wide common system and staorder to ensure best services to their customers irrespective of where the

what services they want Investments in infrastructure and transactional technologies has also ena

Citigroups global expansion

Citigroup was the first institution to offer account aggregation which codifferent account information


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Q3 The assessment of IT investments should be done over a longer term a

time for investments in IT to reflect on the bottom-line

However as implemented by Citibank, all the IT projects should be tho

scanned for feasibility Both the banks had different strategic objectives and both were able to

Hence, we can say that both of them succeeded in there respective IT i

Citigroup had a near about stable IT expenditure from years 2003-06 bexpenditure done by HSBC increased by 40%

Citigroup leveraged on its comparatively lower IT spending which canfrom the net profit generated by the firm

Citigroups increase in profits can be associated to their account aggregwhich followed an integrated approach from the beginning, whereas thinvestments were done through various segments

Hence, Citigroup IT-spending is cleverer compared to HSBC spendinghave a fairly constant IT expenditure while their profit is growing at a rate jhjsbjh

group 13_ sec f_does it payoff strategies of two banks

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