No longer banking on exchanges

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Citigroup Inc. spent much of the last few years establishing itself as a premier b-to-b Internet bank, entering relationships with then-hot companies including Commerce One Inc. and SAP AG to provide the payment systems that would make exchanges run.

As VP-Global e-Solutions of Citibank e-Business, Ann Cairns signed off on many of the deals—for example, in late May Citigroup became the preferred financial settlement provider for Pantellos Group L.P., the independent utility and energy services marketplace—with an eye on making sure that the world’s largest bank wouldn’t be left behind when e-hubs took off.

That, of course, hasn’t happened. Shrewdly, however, Cairns—who heads up all technology efforts for Citibank e-Business, the bank’s largest Internet unit—made sure that Citigroup’s fortunes weren’t linked too closely to that of e-hubs. Under her watch, it has also established itself as the bank to which big companies most often look to make complex international e-payments happen. Indeed, most of the Fortune 500 is dealing with Citigroup in the e-payment space.

Cairns, an Englishwoman and a keen statistician—she is a member of the Royal Statistical Society, and was a research scientist and engineer before joining the bank in 1987—started off in Citigroup’s U.K. investment banking division. After executive-level stints in the bank’s cash management and operations and technology businesses, she was promoted to her current position in April 2000.

BtoB: How’s business?

Cairns: The b-to-b space has been much slower than we expected in North America, in terms of exchanges. But business overall is very good. There’s lots of momentum around the world, out in Singapore, down in Brazil. We’re seeing a lot going on in terms of e-billing.

After all, we never had a totally exchange-based strategy. We deal with Fortune 500 companies, all the way down to the person on the street. If the exchanges aren’t taking off, that’s not going to stop us from building in 2002 or 2003. Everyone’s got to be ready to jump aboard. From our point of view, the exchanges were interesting, and we’ll be ready when they’re ready to flow.

BtoB: The exchange business is slowing down. What could throw a wrench in your plans? What keeps you awake at night?

Cairns: Everybody’s very concerned about marketplace adoption rates right now. A lot of people ask me, ‘Will you stop what you’re doing?’ My answer is no. If you think about what we do, we’re the payment engine that powers Citigroup. That kind of thing doesn’t happen overnight.

We’ve got 35,000 corporate customers out there that rely on us to move $1 trillion dollars a day. That’s where the investments we are making are going.

BtoB: How important is marketing to your strategy?

Cairns: We have a tremendously strong brand. People know us as a huge global bank that’s very innovative. People expect us, then, to have a footprint in the e-space. We build our brand by presenting at a lot of major conferences around the world.

BtoB: Citigroup’s recent Pantellos deal is very industry-specific, focusing on utilities. Does this indicate a vertical strategy going forward?

Cairns: No. We recognize we deal with a lot of different industries. It gives us a lot of traction in the marketing of Citibank e-Business. It also gives us an advantage over the pure horizontal players.

Whether it’s a power, technology or chemical company, we have business experts who understand them and how to give them a pure market advantage. We are also structured by geography. You have to match local market needs.

BtoB: What is Citigroup’s e-business partnering strategy?

Cairns: Citigroup does have a historical reputation for going it alone, of building it ourselves. Here, we’ve tried to strike alliances, and that’s very different from the way we’ve been as a bank. It’s been a rewarding experience. We’ve learned a lot from our partners and they’ve learned a lot. It’s something I’m looking forward to building in the future.

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