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Citibank PESTEL/PESTLE Analysis

               Citibank PESTEL/PESTLE Analysis

Citibank is one of the most well known names in the world of finance globally. Apart from brand recognition, its global expansion and financial strength are also worth noting. The financial brand has undergone some major changes during the year 2015. Apart from having grown simpler, the brand has also grown stronger and safer. In terms of net income, 2015 has been the best year for the financial brand since 2006. Its net income was higher than $17 billion in the year 2015. In only a decade, Citi has seen major changes happening. While it has cut down upon its human resources, the brand has also brought some big changes in its business mix.

The brand is already a leader in the industry in terms of credit cards and has more than 140 million accounts open globally. Citibank’s global consumer bank serves more than 110 million customers in 19 countries globally. Citi also works in partnership with several brands which collaborate with it to increase consumer engagement. From Costco to Home Depot, the brand has partnered several national and international brands. It  is moving faster in the direction of digitization.


Political factors are of special importance in the 21st century. In the financial world specifically, its importance has grown. Apart from the regulatory framework, political factors affect businesses in the other ways too. The reason that government scrutiny of financial services has increased is because of their financial clout. However, political forces can have major negative effects on the financial industry. The problem is that due to heavier scrutiny growth can be hindered. The regulatory environment can be different from country to country and that can make it difficult for Financial Institutions like Citibank to see fast growth. Worldwide the debate over the regulation of financial institutions continues. In some reasons of the world the political regulation is strict.  Asian countries have mostly a tough regulatory environment. While Citibank has seen a lot of growth, the problem happens whenever government regulations become a hindrance to profitable growth.


The economic environment of a nation is directly related to the profitable growth of financial institutions there. During the recession spending had fallen and most people were cutting costs. The level of employment had fallen and that can be a hindrance to the growth of credit card brands. Now, that   the recession has passed and the level of employment has grown all over the world, things have started returning on track. However, the situation is not the same all over the world. The condition was not very good in China last year where the stock market had seen a fall. In India too, the situation grew poor due to demonetization. It was a mistaken step that cost the economy dearly.  The condition of the global economy can have a direct effect on the financial institutions and their profitability. If economic activity is high, its result is high employment level and higher spending by consumers. Economic stability proves profitable for financial institutions like Citibank. However, the condition is not even globally. From time to time fluctuations in key markets can have a detrimental effect on the profits of Citi. The recent Brexit has created some uncertainties that can give rise to risks for Citibank. Competition is also a factor that affects businesses. Thus, there is a direct relationship between the economic forces and the profitability of financial brands like Citi.


Socio-cultural factors also hold an important place in the context of business. Businesses are not divested from society and culture. Nearly any and every big business is affected by. Citi’s business is also spread over several societies and cultures.  Several things happen at the socio cultural level. From one market to another, the image of the same business can differ and the acceptance level for its products and services too. It is why the marketing strategy of a br and differs from one country to another country and one market to another. Culture is a similar factor that affects people’s perception of brands.



Technology is a very important factor affecting the growth and profitability of businesses. In the financial world, its value has kept growing fast. Whether it is about marketing the brand or about customer convenience, technology is irreplaceable. Citibank has also made a fast move towards digitization. In the financial world, things have gone digital at the fastest pace. The higher the level of digitization, the higher is the level of customer convenience and engagement. The higher the level of customer convenience, the higher is a brand’s popularity and its profits. Technology has proved to be an enabler of growth and facilitator of international expansion. Credit card has several products and services on offer for merchants and individual customers, that it delivers worldwide with the help of technology. The big banking brands have all moved fast in the direction of digitization. Moreover, for businesses to grow without investing in IT is nearly impossible.


Sustainability has also emerged as a key trend in the world of business. In every industry businesses are doing their best to minimize their environmental impact and to conserve energy and protect climate. Citibank is also a financial brand committed to sustainability. It is committed to finance $100 Billion in clean energy, infrastructure and technology .projects which can help at building a more sustainable economy. The brand had remained outspoken in its support for the United States to remain in the Paris Climate Agreement and was disappointed because Trump’s move. President Trump instead chose to leave the pact. Apart from having a sustainable operations and supply chain, Citi has invested in other ways in sustainability.  It collaborates with its clients to manage any environmental risk arising out of its products and services. It has made a three pronged strategy to approach its environmental risks. The three pillars of its five years sustainability strategy are – Environmental Finance; Environmental and Social Risk Management; and Operations and Supply Chain.  The key thing to note is that there are several benefits emerging from investment in sustainability. Apart from cost effectiveness and a great reputation, it helps at ensuring a great future for the planet.  Businesses have earned the benefits in all these areas and the biggest benefit is that of a great brand image.


Legal factors too are of utmost importance in the context of business. Their importance has risen in the 21st century. The legal and political framework has become more challenging for businesses. Not just in US, but outside US too these challenges can have a major detrimental effect on businesses. Legal challenges can become a major .risk factor because any tussle with law can be very costly for businesses. Moreover, ongoing changes in the legal framework .often result in increased operational costs for businesses. Fines can range in millions and in case of the financial businesses, the troubles can be even bigger. The legal scrutiny of financial businesses has increased because of their financial clout and impact on the society.  Increased risks also mean higher costs. Now, financial institutions like Citibank have to pay special attention to compliance.