Citigroup Expands Asia Digital in Bid to Reach Affluent Clients

  • Bank aims to increase affluent customer base by 10% this year
  • Head of APAC retail banking Luchetti comments in interview

Citigroup Inc. is expanding its digital-banking channels in Asia as the bank seeks to boost its base of affluent customers in the region by at least 10 percent this year.

The New York-based firm is accelerating the deployment of technologies that allow customers to get advice from wealth managers and make transactions through its Internet and mobile platforms, according to Gonzalo Luchetti, Citigroup’s Singapore-based head of Asia-Pacific retail banking. The retail division currently has about 400,000 affluent clients in Asia, with assets ranging from $100,000 to $10 million.

“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.”

Global banks such as Citigroup, Standard Chartered Plc and HSBC Holdings Plc are seeking to tap into burgeoning household wealth in Asia through new technologies that they hope will bolster earnings in a cost-effective fashion. Citigroup estimates that consumer spending in Asia is expected to overtake North America by 2020, according to its internal projections.

In Asia, the bank intends to offer online services such as wealth advice, investments and video banking to customers in more markets in the region, Luchetti said. More than 90 percent of Citigroup’s retail transactions in the region currently take place in self-service channels, he said.

“The clients are voting with their feet,” he said. “We’re following our clients in that regard.”

Fewer Branches

Luchetti’s division is part of Anand Selvakesari’s Asia-Pacific consumer banking group, which oversees 17 out of 19 of Citigroup’s consumer markets. Selvakesari’s role was enlarged almost a year ago when his group absorbed Citigroup’s consumer businesses in Europe, Middle East and Africa. It accounted for 22 percent of the U.S. lender’s global consumer-banking revenue in the first quarter.

The digital expansion has allowed Citigroup to trim its brick-and-mortar branches in the region, which Luchetti described as an ongoing and “long-term trend” for the industry. The U.S. bank reduced its Asian branches by 11 percent to 397 in the first quarter from a year earlier, according to a statement in April. Average deposits in the region grew 6 percent to about $93 billion in the same period.

When asked about the prospect of further branch closures, Lucchetti said: “There’s probably more work to do in that journey.”

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