assignment of mis

8/9/2019 assignment of mis

1/20


2/20

Executive Summary From since 1963, Citibank serving its customers by providing themquality products and services which are designed in a way that fulfillscustomers needs and requirements conveniently. In service from last 44years, Citibank operates in Pakistan through its seven branches located infive major cities Karachi (3), Islamabad (1), Rawalpindi (1), Lahore (1), andFaisalabad (1). The banks head office is in Karachi.

Bank carry out its operation through many departments such asoperations department, collection department, citiphone services,merchants, and CIU. Operation department consist of card operations andbanking operations and handles the receipts and payment of cheques withhelp of NIFT. Collection department consist of front end, mid range, and hardcore and responsible to ensure the payment from the customers. Citiphoneis a 24- hours service and handles the flow of the traffic of customersdifferent queries regarding the bank products and services and also processthe problem of the customers. Merchant department deals with POS,responsible to increase the outlets for Citi credit cards, receipts andpayments to these merchants, and maintaining the good relationship withmerchants. CIU or credit initiating unit verify all the applications received bybank for its products.

Citibank is the multinational organization with multi-skills and multi-culture peoples. Bank is well aware of that by investing in its people is theonly way of obtaining the desired results. To take care of its employees bankhas complete HR department in Karachi and Lahore. HR activities includerecruitment, selection, performance appraisal, and performance basedincentive system etc.

In the present scenario of hard economic conditions and toughcompetition bank still able to earn profit after tax of Rs. 1064 million. Banksassets, deposits, advances, and equity are Rs.62148 million, Rs. 40838million, Rs.25657 million, and Rs.6826 million respectively in 2002.

Citibank offers the wide range of products and services such as creditcard (gold, silver, and co-branding) loans (personal and home loans), carfinancing, and banking (citigold, local currency account, and foreigncurrency account).

The major competitors of Citibank are SCB and ABN Amro. Bankoperates successfully with limited number of branches is only due to theadvance technology used by the bank i-e database communication system.

In short, Citibank is serving Pakistani customers from since 1963successfully and proven itself as the most prestigious and successful bank inthe industry with its unique products and services.


3/20


4/20

Citigroup InternationalCitigroup, principally through Citibank, has a long and unrivaled

history as a provider of financial services throughout the world. Its globalfootprint includes more than 100 countries in North and South America; Asia

and the Pacific; Western, Central, and Eastern Europe; the Middle East; andAfrica. It offers customers personal service and the advantages of a localbank, while its global platform allows introducing a continuous stream ofnew and innovative products quickly and more cost-effectively thancompetitors.

Its banking, lending, investment and insurance services serve theneeds of individual consumers. Citibank is the leading provider of credit andcharge cards, such as MasterCard, VISA, and private label throughout theemerging markets, and it has one of the largest networks of ATMs. Its fullrange of financial services products serve the needs of small and largecorporations, governments, and institutional and individual investors,including a full range of treasury, foreign exchange, and financial advisoryservices.

Citibank in PakistanCitigroup started its activities in Pakistan in July 22, 1961 by

establishing Citibank in Karachi. Now it operates in 6-major cities of Pakistansuch as Karachi (2 branches), Lahore (1 branch), Faisalabad (1 branch),Islamabad, (1 branch) and, Rawalpindi (1 branch) with its seven branches.Citibank Islamabad involves in:

Corporate banking

Consumer banking.Services of Citibank


5/20

The objectives of launching Citibank Online were

1) Extend its network and overcome the limited branch situation.

2) Achieve savings in CitiPhone/Branches operating costs by divertingcustomers to the Internet. Citibank Online has one of the lowest costs perinteraction as compared to the ATM, phone banking or branch banking. Itcontributes immensely as part of the Strategic Cost Management initiativesthe bank is implementing without compromising on the quality of service.

According to an online banking report published by Ernst & Young, thetransaction costs of the various banking channels are as follows:

Branch $1.07 Call Centre (human) $0.85 Automated Response System (AVR) $0.44 Automated Teller Machine $0.27 Dialup PC banking 1.5 Cent Internet Banking 1 Cent


6/20

3) Meet the increased consumer demand for quick and secure bankingsolutions, anywhere, any time on any device; this is important in stayingahead of competition.

4) Enhance the brand imagery and values in the mind of the customers and

the respects by owning this channel especially that Citibank is seen to beinnovative and ahead of most other banks in terms of technology andproduct development.

5) Create another arm for deepening customer relationships through crosssell and acquisitions of new customers.

Functionalities of CitiBank for lock in theircustomer and lock out their competitors

Pr oducts and services of CITIBANK

The following are various products of CITIBANK. They are

1. Citi Konto : Do you expect that your bank should work for youand not the other way around? Become one of our active clientsand we will show you that we can meet your expectations. CitiKonto is a unique solution for managing your personal finances. Itallows you to avoid unreasonable charges for most commonbanking services which Citibank provides for free within oneadvantageous fee.

2. Term Deposit: If you want to have higher interest rates andcan afford not to have them immediately available Citibank termdeposits are here for you. Citibank time deposits offer wide rangeof choices and flexibility. See for yourself!

3. CitiGold Wealth Management: Those excellent bankingservices, who have demanding life style and who knows the truevalue of their time and money.

4. Investments: Citibank offers its clients the possibility toinvest their financial assets in mutual funds on foreign financialmarkets. We cooperate with the investment companies ING , MFSMeridian Funds and Pioneer Investments, which belong to thelargest assets managers and the quality of their funds are among
http://www.ingfondy.cz/en/http://www.mfs.com/wps/portal/!ut/p/.cmd/cs/.ce/7_0_A/.s/7_0_354/_s.7_0_A/7_0_354?clearPortletSession=truehttp://www.mfs.com/wps/portal/!ut/p/.cmd/cs/.ce/7_0_A/.s/7_0_354/_s.7_0_A/7_0_354?clearPortletSession=truehttp://www.pioneer.cz/http://www.mfs.com/wps/portal/!ut/p/.cmd/cs/.ce/7_0_A/.s/7_0_354/_s.7_0_A/7_0_354?clearPortletSession=truehttp://www.mfs.com/wps/portal/!ut/p/.cmd/cs/.ce/7_0_A/.s/7_0_354/_s.7_0_A/7_0_354?clearPortletSession=truehttp://www.pioneer.cz/http://www.ingfondy.cz/en/


7/20

the best in the world. We currently have more than 180 mutualfunds in our offer.

5. Citi Credit Card: You can use the Citi Credit Card foreveryday purchases, as well as for more expensive investments

or for sudden and unexpected events (accidents in the home,damage to the car, medical care abroad). The Citi Credit Card isone of the safest payment cards on the market with the longestnon-interest period.

The following are services provided by CITIBANK:

1. Internet Banking:

Citibank India offers you Internet Banking that is fast, easy andsecure. Discover the convenience of online banking and secureonline bill payments; with an Instant IPIN (Internet Password).

2. Get Credit card & Bank Statement on E-mail:

Do your bit for the environment! By availing of the Statement onE-mail service, you have the flexibility of receiving your CreditCard/ Bank Account Statement, wherever you are.

3. Bill Pay:

Discover a Simple, Secure and Convenient way to pay all yourUtility Bills at Citibank Online. Pay your Mobile, Landline,Electricity, Water and Insurance payments online using CitibankBill Pay.

4. Electronic Clearance Service:You dont need to issue a cheque every month towards thepayment of your Citibank Card dues.

5. Credit Shield Plus:

Free look privilege for the first 15 days from the date of receipt ofyour Policy Summary


8/20


9/20

single objective; launching a powerful service to its customers tocomplement its e-business strategy overall. Revenues after aperiod of time started flowing too, making the investmentworthwhile.

Evaluation o f E-business strategy and model

There are many ways of evaluating the success of the e-businessmodel and e-business strategies of Citibank, one of which islooking at the financials for the performance of the service for thepast four years. Ms. Sarah Hussain, Web Administrator at Citibanksays The results of the service represented in the informationmanagement system reports covering the performance ofCitibank Online from 2001 to 2004 are very satisfactory and havemet the managements expectations

Number of active Citibank Online customers

Above Table shows that the number of active usersincreased from 2% in the second year of launch to 6% in 2004, ahealthy gradual increase. The transaction values increased tooindicating that customers are feeling more comfortable nowmanaging their funds on the Internet. This is as a result of theheavy investment in promoting and educating the customers on

the gained benefits of using this service. Citibank investedaround $350,000 towards the marketing budget in the first yearof the launch.

New accounts opened through Citibank Online


10/20

Citibank Online is proving to be a successful acquisitionand revenue-generating channel, despite the fact that themanagement did not expect any revenues to be generated forthe first three years of the launch.

The deployment of the program to Citibank UAE, played avery important role in gaining those revenues, as Citibank UAEdid not fund the development work, there were only a couple ofadjustments made to the service to suit the UAE requirements.According to Timmers (1999) there are two dimensions ofanalyzing the e-business model:

1. The degree of innovation:

Citibank is excelling in building and maintaining thecompetitive advantage in the Internet era, all functionalities

offered were well studied and executed in a way where matchingthem is indeed a difficult task. Flexibility is built in the system forfurther enhancements and additions.

2. The extent to which the new functions are integr atedwithin the business model

The functionalities added fit perfectly with the e-businessstrategy and business model opted. They contribute directlytowards meeting the objectives.

Technology AnalysisThe computer technology plays important role almost in every sector ofbusiness. It completely change the traditional way of working. Thus,


11/20


12/20

may provide the greatest flexibility to customize productofferings.

Other banks may choose to purchase a turnkey systemfrom a vendor. In this arrangement the vendor typically provides

the hardware, operating systems, and applications softwarenecessary to enable the bank to offer the particular product orservice to its customers. The vendor will typically provide theservice and maintenance for the turnkey system. A variation is tooutsource the service. Using this option, national banks contractwith a vendor to operate their Internet banking Web sites at thevendors location. This option may be especially well suited forbanks that do not have the technical expertise to develop thisservice in-house. However, such banks need to place additional

emphasis on their due diligence to ensure that security is notcompromised.

Several companies are responding to the developingmarkets for Web pages, Internet banking applications, and billpresentment and payment services. Although many companies inthis market are prosperous and well managed, some are start-upcompanies with unproven products, services, or track records.

National banks need to perform due diligence before

selecting a vendor to provide Internet banking services. Theyshould have a formal service agreement with the vendor thatclearly addresses the duties and responsibilities of the partiesinvolved. National banks need to monitor their vendorsoperational performance, financial condition, and capability tostay current with evolving technologies. National banks typicallyfulfill their responsibility to assure their vendors have soundinternal controls by obtaining internal or third-party audit reports.

Examiners should refer to the IS Handbookfor a complete

discussion of outsourcing issues. Whatever the source of Internetbanking technology, products, and services, it is important for thenational bank to have personnel with an appropriate level ofspecialized expertise, consistent with risk, to monitor andmanage the business.


13/20

Citibank uses well secured technology for its Online Banking.It uses SSL Encryption Algorithm for its transactions. A PaymentGateway is a system that passes Credit Card data, authorizationrequests, and authorization responses over the Internet using

encryption technology.The secure Citibank Payment Gateway allows the Card

member to conduct secure transactions on the Internet using theindustry standard Secure Socket Layer (SSL) technology thatenables 128-bit encryption of data transferred.

Citibank has launched its innovative mobile bankingapplication, Citi Mobile, in the US, allowing customers to accesstheir bank balance, pay bills and transfer funds, among otherfunctions, from their mobile phone. Soon it will launch in Pakistan.

The application combines the consumer need forconvenient, on-the-go banking with advanced mobile technologythat is compatible with more than 100 popular mobile devices,across major US wireless carriers.

"Citibank prides itself on being at the forefront of technologyand innovation and on providing a superior client experience,"said Maura Markus, president of Citibank North America. "CitiMobile is an example of our commitment to providing our clients

even more choices and convenience for their everyday banking,wherever they may be. For our clients, it's like having CitibankOnline in the palm of their hand."

Security has been a high priority in developing theapplication, the bank said. Citi Mobile transactions are equippedwith 128-bit encryption, the same technology used on the bank'swebsite. In addition, no personal information is stored on thephone and, if a handset is lost or stolen, Citi Mobile can bedeactivated instantly. For added security, Citi Mobile only permits

access to accounts from the phone that is registered with theservice, and via a client's six-digit access code.

Initially, Citi Mobile will be launched in California, and by mid-year, all Citibank clients will be able to enroll in the service. ASpanish language version is also expected to be released later


14/20

this year. And after 1 and half year it will launch in Pakistan andother Asian countries.

SECURITY:

Citibank is committed to provide a safe and secure onlinebanking experience. Check out the various initiatives thatCitibank has adopted to safeguard your online banking sessions.Also explore how you can remain safe by adopting simple safetymeasures.

1.

1.1. Unique Internet Password (IPIN):

Your security is governed by your Unique Secure IPIN (Internet toselect your IPIN online, you will have to verify your personalinformation and generate an Online Authorization Code (OAC)that will be sent to your Mobile phone/E-mail address. You willthen have to reconfirm the details and select your IPIN.

Password).

1.2. Citibank Online Security Measures:

Protecting you and providing a secure environment is a toppriority for Citibank. Some of the measures are:

1.3. Secured login

All information passed on between Citibank and yourpersonal computer is "scrambled" and "reassembled" using

128-bit encryption, the highest level of encryptioncommercially available.

You can access your account by using only the Citibank-issued Card number and PIN/password. You have to enterthe Internet Password (IPIN) every time you login to CitibankOnline.


15/20

1.4.Automatic time out

Once logged in to Citibank Online, if there is no activity for 5minutes, your secured Citibank Online session will beautomatically terminated to help protect against

unauthorized access.1.5.Automatic lock out

If the Internet Password (IPIN) has been entered incorrectlysix consecutive times, Citibank will lock any further onlineaccess to the accounts.

If you have been locked out of your accounts due toincorrect PIN/password entry, contact your local CitibankCustomer Service Officer.

2. Digital Certificate from VeriSign

Digital Certificates provide you the evidence of the server'sauthenticity which safeguards users from trustingunauthorized sites and allows the session to be encrypted.

This is provided by a third party, the Certification Authority,which in this case is VeriSign.

You will see a 'closed lock' icon at the bottom of theInternet Banking screen.

Clicking on the lock will allow you to see the VeriSignCertificate authenticating the site.

PERFORMANCE OF INTERNET BANKING

1 Execution

1.1 The aspects to be reviewed and the review process should bechosen by taking into account the intended scope and objective

of the review as well as the approach defined as part of theplanning process.

1.2 In general, in gathering, analysing and interpreting theInternet banking environment, a study should be made ofavailable documentation, such as bank regulations about Internetbanking, Internet law, privacy law, web banking systemdocumentation and use of the Internet banking solution.
http://www.online.citibank.co.in/portal/generic.jsp?stringID=newgenbean1&contentID=cbxcbolosvsignscrpg&viewID=MY_PORTAL_VIEW&contentType=PSDisplayContenthttp://www.online.citibank.co.in/portal/generic.jsp?stringID=newgenbean1&contentID=cbxcbolosvsignscrpg&viewID=MY_PORTAL_VIEW&contentType=PSDisplayContenthttp://www.online.citibank.co.in/portal/generic.jsp?stringID=newgenbean1&contentID=cbxcbolosvsignscrpg&viewID=MY_PORTAL_VIEW&contentType=PSDisplayContenthttp://www.online.citibank.co.in/portal/generic.jsp?stringID=newgenbean1&contentID=cbxcbolosvsignscrpg&viewID=MY_PORTAL_VIEW&contentType=PSDisplayContent


16/20

1.3 To identify any problems relating to the Internet banking areawhich have been noted previously and which may require follow-up, the IS auditor should review the following documents:

Previous examination reports

Follow-up activities

Work papers from previous examinations

Internal and external audit reports

1.4 The IS auditor should map the key processesbothautomated as well as manualrelating to the Internet bankinginitiative/system.

1.5 The assessment of the core business risks (set out in 6.1)should include a critical evaluation of the Internet banking

objectives, strategy and business model.1.6 The IS auditor should then assess the probability that therisks identified pertaining to these processes (business as well asIS risks) will materialise together with their likely effect, anddocument the risks along with the controls, which mitigate theserisks.

1.7 As part of the IS risk assessment, external IS threats shouldbe evaluated depending on the nature of products offered by abank and the external threats to be addressed. These threats

include denial of service, unauthorized access to data, andunauthorized use of the computer equipment, which could arisefrom various sources such as casual hackers, competitors, aliengovernments, terrorists or disgruntled employees.

1.8 Depending on the nature of the pre- or post-implementationreview, the IS auditor should test the significant processes in thetest and or production environment to verify that the processesare functioning as intended. These tests include testing of

balance inquiry, testing of bill presentation and payment andtesting the security mechanisms using penetration testing.

1.9 In post implementation review the IS auditor should obtain, atleast, an understanding of network mapping, network routing,systems and network security assessment, and internal andexternal intrusion.


17/20

1.10 Since the Internet banking solution is predominantly aninformation technology solution, it should meet the informationcriteria established in COBIT, as well as other relevant standardsor regulations of the industry. The extent of compliance with the

information criteria, standards and/or regulations and the effectof noncompliance should be analysed.

2 Aspects to Review

2.1 The following organizational aspects should be reviewed forwhether:

1. Due diligence and risk analysis are performed before thebank conducts Internet banking activities

2. Due diligence and risk analysis are performed where cross-

border activities are conducted3. Internet banking is consistent with the banks overall

mission, strategic goals and operating plans4. Internet application is compliant with the defined and

approved business model

Competitor Analysis

Following review of the nine foreign banks operating in Pakistanclears that Citibank is facing the hard time from two banks i-e StandardChartered and ABN Amro.

PROVISIONS:Provisioning against non-performing loans affect the profitability ofbanks directly. As far as provisions are concerned, Citibank made thehighest provision amounting to Rs 154 million followed by AGZ bank, ABNAmro, and HSBC RS.40 million, 16 million and 10 million respectively. SCBand MB have written back the provisions this year amounting to RS 49million and Rs. 49 million respectively.

DEPOSITS:


18/20

SCG with total deposits of Rs 57,804 million controls 33.43% per centof the total deposits (172,867 million) made by all foreign banks, followed byCitibank and ABN Amro with 40,838 million or 23.62% and 34,696 million or20% respectively. Out of the remaining banks only the AGZ bank has morethan 10% share in deposits i-e 11.68%.While AGZ registered the highest

growth in deposit of 20.8 percent, the banks experiencing major decline indeposits were CA bank (47.1%) and Deutsche Bank (32.4%). Citibank alsoreported the decline in deposits by (1.6%).

ADVANCES:Six banks out of 9 have registered decline in advances. Citibank also

reported decline in advances by (5.4%). The banks registering the growth inadvances are AGZ, SCB, and ABN Amro by 28.4%, 10.9%, and 5.4%respectively.

PROFIT BEFORE TAX:However, when one looks at the profit before tax figures of these

banks, SCB has earned the highest profit amounting to Rs 2594 million,

followed by Citibank and ABN Amro amounting to Rs.2288 million and Rs.1307 million.

ASSETS:SCB ranked 1st according to the banking survey of Pakistan with

highest value of assets amounting to Rs. 82498cmillion, followed by theCitibank and ABN Amro with the assets amounting to Rs. 62148 million and45,722 million respectively.

RETURN ON ASSETS:One of the criteria for evaluating the performance of commercial

banks is return on average earning assets. On the basis of this, Citibank

emerged to be the best for the year 2002. It improved from 3% to 3.7%followed by the MB, SCB, and ABN Amro with 3.5%, 3.1%, and 2.9%respectively.

RETURN ON EQUITY:Return on average equity is important for the head offices of these

banks. Citibank has the largest equity of Rs 6826 million followed by SCBRs.6312 million and ABN Amro Rs.3140 million. The ROE of the foreign banksfor the two years 2005 and 2006 AGZ emerges the best bank as far as REOis concerned with 39.1%, followed by the ABN Amro, SCB, and Citibank with34.5%, 28%, and 19.4% respectively.

MARKET SHARE:

Overall market share of foreign banks as per economic survey ofPakistan is 2.5% but the banks are claiming different shares. It is difficult forresearchers to know the actual market share.

BRIEF ON THE DEPARTMENT WORKED IN/ TASKSPERFOMED / CONTRIBUTION MADE DURING


19/20


20/20

Job security. Lack of participation from the employees As major commission is performance based therefore employee can

do everything to get their commission. Senior employees ask juniors for their personal work during the office

hours. Break down of system also disturb the banking operation. As there is performance base incentive system employees are under

pressure (Stress) to perform best. In case of failure their earning willbe affected.

CONCLUSION:Citibank is one of the oldest foreign banks operated in Pakistan from

last 44 years prove itself as the best and most prestigious bank in the

banking industry. Due to low interest rate prevailing in the economy bankshifted its emphasis towards consumer banking. Bank has the effectiveadvance technology which enhances its efficiency of operations. Thistechnology also provides bank competitive edge over its competitors.

Bank serves its customers by providing a wide range of qualityproducts and services such as credit card, loans, car financing, e-card,banking accounts. Hospitality and personal banking is the distinct featurewhich prominent it among its competitors.

Bank considers its employee as the real assets and no hesitate toinvest in human capital. Bank has the efficient and competitive work forcedue to which it retains its position in the market. Bank cares for its employee

not only by providing attractive compensation but also take the personalcare of its employees.In short, Citibank is the multinational bank with diversified strategies

of delighting its customers by providing the modern globally acceptedproducts and services which suits their financial needs conveniently.

Documents

assignment of mis