22 April 2018
Richard Bird

Richard Bird

Richard Bird - JPMorgan Chase

9Posts 31,963Views 2Comments
A post relating to this item from Finextra:

Citi in talks to sell IT assets - Economic Times

23 June 2009  |  7270 views  |  0
Citibank is currently in discussions with Indian IT firms Tata Consultancy Services (TCS) and Wipro, among others, to sell some of its internal IT platforms, according to local press reports.

Death By A Thousand Cuts

24 June 2009  |  2759 views  |  0

Citi's recent announcement of a potential deal to sell off IT assets confirms that no matter what the century or circumstance, most things never change. I had high hopes that Citi would emerge from their current troubles as a leaner and stealthier competitor in the global market, but that hope is diminishing in light of their "death by a thousand cuts" business model.

The floating of intellectual property and proprietary systems as clearance sale, or even garage sale, type merchandise reeks of the vicious cycle of outsourcing/insourcing/re-outsourcing/re-insourcing that banks did in the 80's and 90's with IBM and other service providers. It did not work then, and it will not work now.

The off-shore firms, whether they be Infosys, Wipro, Tata or (cough, cough) Satyam have moved along the same evolutionary path that every staff augmentation company has yearned to tread. First, they provided bodies. Now, leadership believes that they must get into engagement-level work with their clients. The problem with this approach is the same as it has always been. Ownership of intellectual property and proprietary systems requires an in-depth knowledge of the business associated with those assets. When these assets are treated as stand alone commodities that can simply be stripped out and sold to the highest bidder, the end results have generally been a write-off for the acquirer and damage control by the client.

Citi would be better off, in the long run, to spin these functions and technologies off into a stand alone business or sell them (probably at a cheaper price) to a niche firm that has the required business expertise to provide the service expected by Citi and their clients. Citi keeps cutting itself to death; how much longer until it sells off plum assets like the whole of Global Transaction Services? If this deal is any indication, not long.

TagsRisk & regulationRetail banking

Comments: (0)

Comment on this story (membership required)

Latest posts from Richard

It Would Almost Be Funny If It Wasn't So Sad

31 August 2009  |  5556 views  |  0 comments | recomends Recommends 0 TagsCardsSecurityGroupTransaction Banking

Is This Thing On? Captain Obvious - Is That You?

24 July 2009  |  3383 views  |  0 comments | recomends Recommends 1 TagsRetail bankingGroupTransaction Banking

Lost - As Defined by an 11 Year Old

22 July 2009  |  3873 views  |  3 comments | recomends Recommends 1 TagsSecurityRisk & regulationGroupTransaction Banking

The Unicorn in the Middle Office - What Technology Isn't

20 July 2009  |  3498 views  |  2 comments | recomends Recommends 2 TagsRisk & regulationRetail bankingGroupTransaction Banking

How I Learned to Stop Worrying and Love the ATM Bomb

16 July 2009  |  3223 views  |  0 comments | recomends Recommends 2 TagsSecurityRetail banking

Richard's profile

job title Vice-President Information Risk Manager
location Columbus
member since 2009
Summary profile See full profile »
Seasoned financial services veteran in; information and operations risk management, hedge fund administration, retail bank and treasury operations, commodities trading and M&A due diligence.

Richard's expertise

Member since 2009
9 posts2 comments
What Richard reads
Richard's blog archive
2009 (9)

Who's commenting on Richard's posts