As Citigroup Inc. seeks to boost its base of affluent customers in the region by at least 10 percent this year, the bank is expanding its digital-banking channels in Asia.
According to Gonzalo Luchetti, Citigroup’s Singapore-based head of Asia-Pacific retail banking, deployment of technologies that allow customers to make transactions through its Internet and mobile platforms and to get advice from wealth managers, is being accelerated by the New York-based firm. With assets ranging from $100,000 to $10 million, the retail division currently has about 400,000 affluent clients in Asia.
“The objective is to continue to bring consistent client-led growth to our business over the next few quarters,” Luchetti said in a May interview in Hong Kong. “We have to keep growing clients the way we have over the last 12 months when we started this transformation,” with digital banking driving the wealth-management business, he said, adding that growth in that period was “in a solid double-digit range.”
Through new technologies that they hope will bolster earnings in a cost-effective fashion, efforts to tap into burgeoning household wealth in Asia are being made consistently by global banks such as Citigroup, Standard Chartered Plc and HSBC Plc. According to its internal projections, by 2020, consumer spending in Asia is expected to overtake North America estimates Citigroup.
Luchetti said that in more markets in the region, services such as wealth advice, investments and video banking to customers are being intended to be offered by the bank in Asia. He said that the self-service channels are the ones that are used at present by more than 90 percent of Citigroup’s retail transactions in the region.
“The clients are voting with their feet,” he said. “We’re following our clients in that regard.”
17 out of 19 of Citigroup’s consumer markets are overseen by Anand Selvakesari’s Asia-Pacific consumer banking group and Luchetti’s division is part of Anand Selvakesari’s that group. When his group absorbed Citigroup’s consumer business in Europe, Middle East and Africa, Selvakesari’s role was enlarged almost a year ago. In the first quarter, it accounted for 22 percent of the U.S. lender’s global consumer-banking revenue.
Describing the shifting of brick-and-mortar branches to online as an ongoing and “long-term trend” for the industry, Luchetti says that tBottom of Form
he digital expansion has allowed Citigroup to trim its brick-and-mortar branches in the region. According to a statement in April, compared to the number a year earlier, the U.S. bank reduced its Asian branches by 11 percent to 397 in the first quarter. During the same period of time, there has been a 6 percent rise in the average deposits in the region grew to reach about $93 billion.
“There’s probably more work to do in that journey,” Lucchetti said when asked about the prospect of further branch closures.
(Adapted from Bloomberg)