Citibank
Amongst the banks, it was interesting to note the distinct difference between a state-owned Banco De Brazil and Citibank (presented by Marcio Castro, Director1, Internet Business). Whilst the first clearly had the advantage of being a local giant, the second (a foreign bank) had to be very conscious about marketing and creating brand awareness. Both banks rightly focused on different segments of the markets. Whilst Banco De Brazil identified its role as the bank of the masses, Citibank quite rightly positioned itself to serve the affluent clients. Perhaps Citibank realized that it did not have the network nor the scale to compete with the local giants in the more remote areas of the country. –Douglas Choo
Of the
company visits in Brazil, the one that was most surprising to me was the
Citibank presentation. Citibank’s
strategy is to go after the top 2% of income earners in Brazil. At first, I found this rather confusing given that the
majority of Brazil’s 166 million people are in the lower tier of income
earners. If a bank could capture a
significant portion of this demographic, I would imagine that the volume of
transactions could be rather profitable. However,
Citibank’s view is much different. The
top percent of earners in Brazil control such a significant portion of the
wealth of the country that capturing this segment can be exceptionally
profitable. This customer is
typically more sophisticated and is in need of a variety of services.
Citibank bank can leverage these needs to cross sell products within this
segment. In addition, Banco Do
Brasil maintains a significant lock on low-income bankers through their long
history with that consumer segment that Citibank has no option but to go after
more sophisticated individuals. – Alfredo
The definition of an A and B
class as a target market for Citibank is quite interesting and a bit surprising
given that this strategy is not particularly associated with Citibank in North
America. There are several other
interesting differences between Brazilian and North American banking.
First, banking services in Brazil are linked while the US is more
fragmented; this means that a bank client is likely to use one bank not only for
banking but also for mortgages, investments, insurance and credit cards.
Second, Brazil is a check-based society while the US is a predisposed to
using credit cards. It was
interesting to hear how Brazil is working to make the clearing process for
checks more expensive to encourage the use of credit cards.
– Myla Lopez