Vikram Pandit’s universal banking model might expose vulnerability and inefficiencies in Citi banking operations
Karen Zuba
Jun. 29, 2008

Citi bank is headed for a new business model. It is called universal banking model that seamlessly integrates Citi Bank’s various financial operations. The concept is nothing new. Many large banks especially outside US has tried the approach outside with little success. Smaller banks work on universal banking model as banking in regional banks evolves in that model.

The biggest question for Wall Street analysts is the viability of this model. Pundit the new Citi Bank champion has decided to push for it. But there are problems. Citi Bank is a large entity. Its banking operations span many continents and cities across the globe. Its financial services operations and investment banking operations are not integrated like smaller regional banks.

Pandit is eager to initiate the new performance bonus model based on the universal banking where managers cooperate and not just compete. However, these banking operations are diverse and disintegrated. A manager will have to depend on someone he or she worked with for counting group performance bonus.

The initiative of the new chief executive can be devastating in the short run. It would expose vulnerability and inefficiencies in Citi banking operations. It is similar to trying integrate a bunch of diverse companies all on a sudden to make them work in concert. A great theoretical approach but not necessarily a practical one specially when banking sector faces severe challenges in the next eighteen months.

Vikram Pandit’s universal banking model might expose vulnerability and inefficiencies in Citi banking operations
Karen Zuba
Citi bank is headed for a new business model. It is called universal banking model that seamlessly integrates Citi Bank’s various financial operations.
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