Digital age making Citibank more competitive in Thailand

With digital banking pushing brick and mortar branches towards obsolescence, Citibank is deepening it presence in key digital ecosystems in countries such as Thailand making the bank more competitive in the Asia-Pacific region, according to the bank’s regional chief executive who was in Bangkok to celebrate Citibank’s 50th anniversary of doing business in the Kingdom.

“Many banks are talking about digital, but primarily as a channel. For us, digital is not a channel. For us, digital is the business model,” said Francisco Aristeguieta, Citi’s chief executive in Asia-Pacific.

The Asia-Pacific region now provides Citibank with roughly one quarter of its global profits. Aristeguieta said that 95 percent of his bank’s consumer transactions in the region are already taking place digitally and not in any physical branch. Branches have become irrelevant, he said.

That presents Citibank with strong opportunities to capture more business, as it can’t compete with local banks in Thailand in terms of numbers of branches. The bank has had a presence in Thailand since 1967, when it took a 50 percent stake in Bangkok First Investment Trust, and acquired a full Thai banking license in 1984. While it has just three branches in the Kingdom, it serves over one million customers in Thailand, and over 16 million customers in Asia.

“You were locally relevant before if you had a branch practically everywhere. Well, that’s not the case today.Today, you are going to be locally relevant to the extent that you are in the digital ecosystem that your target market chooses to be in. That is what will give you relevance,’’ Aristeguieta told the Bangkok Post newspaper in an interview.

That approach aligns with the thinking of the Thai government, which has said it is moving towards a cashless society and has introduced its own electronic payments system.

Citibank is a major player in the credit card market and in Asia one third of its credit card clients and 40 percent of its personal loan clients came to it through its digital channels.

As part of its strategy, the bank partners with local developers and applications popular in each of its markets. In Thailand, Citibank partners with the LINE mobile application through which customers can access its services and information.

Through LINE, clients can chat with bank staff about transactions, offers, products and services.

Furthermore, in Singapore the bank just launched its first chatbot that communicates with clients in real time through their mobile phones. It is the first use of that technology by the bank anywhere in the world.

While many banks closed international branches and went through a period of retrenchment in the wake of the 2008 financial crisis, Citibank held steady. The bank’s international network remains one of its greatest strengths, Aristeguieta said.