The Research Proposal For Banking Industry

by Shamsul
Banking Industry
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Research Proposal For Banking Industry

Research Proposal

Banking Industry

Citi Bank


Executive Summary.


Management Decision Statement.

Research Questions.

Business Research Objectives.

Report Research Design.

Ethical Concerns.


Executive Summary

The research proposal explains initially the need to conduct this research. It is shedding light on some recent facts and figures that clearly explain. Why Citibank requires immediate remedial actions if it wishes to challenge competitors and restore its former position in the banking market.

The proposal discusses how Citibank has suffered and how it can bounce back through exploiting its own competencies and brightening up and adding a new life into its core competitive advantages.

The proposal extends the need to research and investigate two main objectives that are proven to offer results when applied efficiently. First is expansion in developing economies, and second incorporating technology in banking operations.

The research will be based on a mixed-method research design. Where both quantitative and qualitative research data used to derive answers to the research questions.

All ethical concerns are in under consideration to ensure that all parties/individuals involved in the research are aware of the research’s purpose.


Citibank, the Global Consumer Banking (GCB) division of CitiGroup revealed in its 2017, second quarter statement. A total earning of $8 billion which is an increase of 5% compared to the same period in 2016 (Citi, 2017). Revenues were also recorded at an increase of 5%, derived from a 5% increase in both the North American GCB operations and International GCB operations (Citi, 2017).

The net income of Citibank’s GCB operations decreased by 12% in the second quarter of 2017, revealing an income of $1.1 billion (Citibank, 2017). The revenues were highly cut down as an offset of higher operating expenses and high credit costs that prevail currently. The operating expenses also enhanced by 5% both on a constant dollar basis and reported basis largely owed to Costco portfolio addition. Other reasons include continued investments by the GCB branch growth in volume, which were measures taken as an ongoing efficiency saving technique (Citi, 2017).

In a break-up analysis of Citi Bank’s GCB operations, North American GCB revenue was recorded at $4.9 billion, and the International GCB operations even though showing 4% increase, still amounted to $3.1 billion (Citi, 2017). Similarly, net income reported from the North American GCB operations revealed earnings of $670 million, a decrease of 18%, whereas the International GCB operations showed an income of $455 million which is a decrease of 3% (Citi, 2017).

The above figures clearly depict that Citibank is struggling to keep its market competitiveness. Even though the banking industry has been experiencing a downfall worldwide; however, banks are employing new techniques to exploit areas that can offer them a competitive edge, using which they can enhance not only their annual performances but also offer tough competition in the already competitive global banking market.

American Express Bank, is a credit card giant and gains its competitiveness from its various loyalty and credit card offers. For example, Citi credit card offers more than 2 billion different credit cards, manages about 60 billion credit card transactions, and focuses on the transaction volumes of customers offering various benefits (Trefis, 2014).

This earns the company a 1.65% increase in share value (Trefis, 2014). American Express comparatively has only 107 million cards, and manages only 6 billion transactions (10% of Visa); however, it shows a 1.71% increase in its share value, as it opposing to Visa focuses on spent amount volume rather than transaction volume (Trefis, 2014). American Express thus earns $33 billion worth of revenues, with Visa earning only $14 billion (Trefis, 2014).

As far as the case of Citi Bank is concerned, its competitive edge lies in its global reach, expanding out to 160 countries, where the bank is physically present. This report analyzes how this competitive advantage can be managed and what can be done to help Citi regain its lost glory at a time when the overall banking sector is struggling badly.

Management Decision Statement

Statement 1 – Expanding Global Consumer Banking Operations To Developing Countries Other Than Asia Pacific

It is a proven fact that Citibank’s biggest strength is its massive global presence, and sighting the level of income and revenue being generated from operations in the past few years, even though Citibank has managed to come out of the crisis it faced in 2007, the bank however is not established enough to sustain growth on a regular basis and thus the need is to enhance and strengthen its ace competitive advantage, global presence. It is clear from the figures discussed in the introduction section that International GCB operations are suffering badly compared to North American GCB operations.

In a scenario where even though the European banking region is suffering overall, increased banking activities are being experienced in developing countries (Middle East and African region, also including the Latin American region), especially in those regions where the use of internet is increasing vastly (Panara, 2013).  The research will focus primarily on which countries would prove to be viable options for Citibank operations to be introduced, and how in the present situation can Citibank incorporate the level of investment required for this expansion.

Statement 2 – Focusing On Online Banking Services

Online banking services is a weak point of Citibank, which needs to be focused on a priority basis so that business that is being lost owed to inefficient online presence and services can be regained.

Whatever services Citibank is offering its customers in the name of online services is not at all adequate as to what is currently being offered by competitors in this regard. Secondly, most of the Citibank online services are targeted towards US customers only, ignoring largely customers from other parts of the world (The Nation, 2014). Incorporating technology is an essential element of banking these days as every bank that is competing on any level in the industry today uses technology as its backbone (Kumar, 2012). Banking is a services industry that dwells on customer experience and using technology is the one ensured way to engage with customers in the most reliable manner (Ramey, 2012).

Research Questions

This research is centered primarily on researching ways through which Citibank can enhance its performance and move towards sustainable growth in the future. According to EY (2012) the global banking outlook was very gloomy with banks facing several structural issues and tackling already struggling economies. Standing at that point the future of banks did not look very bright and this was the time when many banks declared bankruptcy or were taken over. 2013 however was a bit optimistic and even though the prospects may not have been great, they were definitely better (EY, 2014).

Fast forwarding to 2017, recovery has been evident in Europe, where banking has improved owed largely to refinancing operations of the European Central Bank however challenges still remain limiting the percentage of bounce back. USA in terms of banking has been much better however other factors that depict economic recovery have been very slow, limiting the assumptions as to what the future will bring.

Asia has been much better comparatively, with China developing a soft landing for its banks and aiming towards long-term development of the economy, which is good news for banks, whereas rapid growth economies of Asia, other than China, have also largely focused on infrastructure and high-end industry set up, depicting gradual enhancement of economy, signaling a brighter banking future in the region.

Also, technology integration has been the buzzword in every industry and the banking industry is no exception. Banks have increasingly begun to virtualize their services with a significant increase in banks that operate solely online. This indicates how considerably important it is for banks to incorporate technology in their processes and operations and offer value to their customers (EY. 2014).

Keeping these major factors in mind the research questions that will be answered in the report will be

Q1 – What countries or regions can offer profitable expansion opportunities to Citibank, transforming into sustainable returns over time?

Q2 – What should be done to incorporate technology in the banking operations of Citibank and how can Citibank reach out to its International customers via online operations?


Business Research Objectives

The General Research Objectives of the report are specific research on ways through which Citibank can enhance its market share and organize its annual earnings and revenues in a manner that induces some level of sustainability. 

Specific objectives of this research include

  1. To analyze the viable options of expansion that will not only enhance the competitive advantage of Citibank but also offer means of sustainable growth in future operations.
  2. To develop a proper plan of expansion.
  3. To determine how technology can be used to aid the business operations of Citibank.
  4. To establish a sound online banking system that caters to all customers of Citibank spread in 160 countries.

After the 2007 banking crisis that hit financial institutions, Citibank was one bank that was hit badly, primarily as 60% of the loans the bank was buying were defective. Also, Citibank has always been an aggressive market player which has earned its competitive advantage of being a globally present bank worldwide (Seeking Alpha, 2013).

After the restructuring of Citibank started off in 2010 when the government sold off its share of Citibank, and the appointment of a new CEO was made, a lot of changes were brought about in the overall Citibank structure. Citibank has been involved in a lot of purchasing and acquisition deals, however, during the restructuring process, a lot of bad assets were laid off in an attempt to lower the financial debt of the bank, and it was decided that market expansion would be adopted as a measure of expanding operations and revenues.

Even though the decision was made however no significant action was taken in this direction which is evident from the revenues and income discussed of North American GCB and International GCB. The banking sector is still struggling in North America, with even worse situations in Europe however, the Asian and African banking markets are faring much better and developing economies are in need of banks that can cater to their requirements (Seeking Alpha, 2013).

By 2013 Citibank’s 60% of revenues were generated from its International GCB operations however this has declined in the previous couple of years and there is a need to explore developing economies in Asia, the Middle East and Africa, where economies are growing and require support of financial statements. A few such markets include India, Malaysia, China (Seeking Alpha, 2013), the Philippines, Myanmar, Cambodia and Laos (Jennings, 2017). All these economies are showing growth rates that recommend their need for financial institutions, with a significantly growing middle class, which serves as the main customer class of Citibank.

What can benefit from expanding in these areas is that not many global banks are present in these countries to offer any significant competition, but also the absence of Fintech (institutions other than banks that offer finance-related services instantly) offers the chance to capture a wider societal segment, offering instant services that can hamper the success of Fintech in these economies as they progress further on (John, 2017).

Assessing newer economies and introducing services that offer the capability of challenging Fintech technologies and services will offer extra benefits and more market share. It is obvious that as economies grow, services from other parts of the world will reach them to offer their services; however, the early movers are always at an advantage as they can establish market demand and offer advance services that will be needed in future, eliminating the ease of market entry for competitors and Fintech companies, owing to the market trust factor involved. Here again focusing on middle-class, small and medium-sized enterprises and any other segment of society that is either under-banked or unbanked at this stage will be key to enhancing market share and annual profits (Vinayak, Lee, Rajendran & Sengupta, 2016). 

The second main objective of the research is to induce a value-focused digital transformation of Citibank. Online banking and other digital solutions to banking that are readily being offered to banking consumers nowadays by competitors are found to be lacking in Citibank operations. Citibank does manage online banking services. However firstly they need to incorporate more services in their digital offering. It included mobile banking and acknowledging credit card use via mobile (Poh, 2017). This is one area that can be of immense benefit. It will incur only the initial costs of setting up digital technologies. However, that can be used to favor Citibank and satisfy its customers, as later on it can be a leading cost control element of the bank (Vinayak,, 2016).

It is an essential requirement for any business, including banks, to adapt to the changing environment and the shift of finances from cash to credit and online transactions demands banks to cater to the different requirements of customers in this area.

Report Research Design

The research design will constitute a mixed method which will incorporate both qualitative and quantitative data. The qualitative data to be collected from currently performed surveys and research done on the economies of developing countries and the potential they carry for banking. This method will primarily be used for assessing which countries are the most viable expansion options for Citibank. Here examples of expansion in these economies will also considered (if available) to generalize any threats or shortcomings that may be faced.

The quantitative research will include information collected from questionnaires sent out to existing and new customers. These are related to what they expect their banks to offer them in terms of technology-based services. Along with collecting information on what is being offered to existing customers and how satisfied they are with these services. This method of research will be undertaken chiefly to assess what services will be needed or demanded by customers. These are based on which information for the next step of how to offer that service/s will be decided upon.

Analysis of available literature will offer enhanced information on the expansion viability of selected countries. Out of which the best growth-inducing economies can be available for the next expansion projects. Whereas detailed analysis of questionnaires and comprehensive investigation of results can help in assessing which online services are suitable for customers. Thus offering a point from where Citibank can start its online operations. It star focusing initially on popular on-demand services, before moving towards introducing other innovative and enhanced online services.

Ethical Concerns

All the coolected information about any customer used in the research will be kept secret. These are solely for the purpose of this research. Also, all participants of research will be informed on the reason for collecting this information. Also, will be asked for permission for the given information to be used/limited to this report only.


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Citi. (2017) Second Quarter 2017 Results and Key Metrics. (online) Available at [Accessed: 10 Sep, 2017].

EY. (2014) Banking And The Global Economy. (online) Available at—capital-markets/global-banking-outlook-2013-14–banking-and-the-global-economy [Acessed: 11 Sep, 2017].

Jennings, R. (2017) These Are the Fast Growing Economies In East Asia In 2017. (online) Available at [Accessed: 10 Sep, 2017].

John, A. (2017) The Changing Shape Of Asia’s Private Banking Sector. (online) Available at [Accessed: 10 Sep 2017].

Kumar, B. (2013) The Importance Of Technology In Banking Industry. (online) [Accessed: 10 Sep, 2017].

Panara, C. (2013) Citibank. (online) Available at [Accessed: 10 Sep, 2017].

Poh, M. (2017) 10 Ways To Turn Your Smartphones Into Credit Card Readers. (online) Available at [Accessed: 10 Sep, 2017].

Ramey, K. (2012) The Role Of Technology In Banking Industry. (online) Available at [Accessed: 10 Sep, 2017].

Seeking Alpha. (2013) Citigroup’s Competitive Advantage. (online) Available at [Accessed: 10 Sep, 2017].

The Nation. (2014) Role Of IT In Banking Sector. (online) Available at [Accessed: 10 Sep, 20-17].

Trefis. (2014) How American Express Gains A Competitive Advantage From its Closed-Loop Network. (online) Available at [Accessed: 10 Sep, 2017].

Vinayak, H. V., Lee, G., Rajendran, K., & Sengupta, J. (2016) Weathering The Storm: Asia Pacific Banking Review 2016. (online) Available at [Accessed: 10 Sep, 2017].

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