The key problems that must be answered in this case study are the following. The most important question is if Citibank should launch the card program in the Asia Pacific and in which countries? The answer to this question is a strong yes to all countries with the exception of Korea. Another key problem is: How should the credit card launches be customized to particular countries based on marketing information gathered by the company? Another key problem is: How does Rana Talwar convince his country managers to accept the product, while simultaneously convincing the company's U.S. headquarters to accept the project. The final key problem is: Which risks are involved with starting the credit card business in Asia and how these risks should be managed? This memo is written from the point of view from the Risk manager of Citibank.
2. Most important facts.
The economies of the Asian Pacific countries are growing. Their infrastructures are not up to Western standards, but improving. The future potential is enormous. The Asian Pacific countries have markets with little credit experience. There are no credit agencies where customer payment profiles are maintained. So it is hard to get information if customers pay their bills. In Indonesia there is a history of poor consumer payment on installment debt. Fraud in the Indonesian financial sector is not uncommon. Most Asian Pacific legal infrastructure is inadequate so that we cannot collect legally.
In these countries it can be hard to find good employees to run a credit card business.
The Asian Pacific countries have limited distribution capabilities. Direct mail is therefore more difficult than in the United States. Also telephone lines are not always there, working or easy to get.
The Asian Pacific countries have a low income per capita (especially India, Philippines and Thailand). .
Credit Card usage patterns differ country by country. Citibank needs to be careful with its high end image.