Magazine article American Banker

Citi Centralizing Global Custody Operation with Product-Line Focus, Systems Revamping

Magazine article American Banker

Citi Centralizing Global Custody Operation with Product-Line Focus, Systems Revamping

Article excerpt

Citicorp announced to its employees a management reorganization of its Worldwide Securities Services unit, which has lost ground in recent years in the cut-throat custody market.

The reorganization will replace a regional sales and marketing structure with one based on product lines.

Citi has appointed worldwide heads of sales, marketing, and relationship management for each of the unit's 21 product lines, which include global custody, clearing, and trust services.

Citi also aims to revamp technology -- by creating common systems to replace multiple, disparate systems, and by consolidating some processing -- in order to create products with consistent features.

Citicorp is the world's largest global custodian, with $600 billion assets under management and $250 billion in cross-border assets. In recent years, however, it has been seen as less focused than rivals such as State Street Boston Corp. and Northern Trust Corp.

Because Citi has always been organized along geographical lines, rather than product lines, the bank has been unable to provide the same level of service in all the 47 countries where it offers custody and clearing services.

In addition, it has had difficulty making winning bids for the worldwide business of potential customers, because operations in one or more countries may hold out for higher fees.

Citi also has multiple, incompatible computer systems in many countries, giving it higher unit costs than some of its competitors.

Steven Baker, division executive in charge of Worldwide Securities Services, said he did not anticipate any layoffs in connection with the reorganization.

"When I got into the position six months ago, I said we would spend six months in identifying the various issues confronting us around the world and look at where we've done a less than perfect job," Mr. Baker said. …

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