April 28, 2010

Mitigating the risks related to entering new markets is completely reliant on how well a bank can understand local customers, local regulators and the local workforce. With poor "local stakeholder knowledge," no bank will ever get anywhere and will simply harm its brands, so the risk is not only in failing in a business venture but in reputation damage. Many institutions pick their niches and stay there or develop slowly only after they are regarded as quasi-local banks with embedded local processes and cultures.

IT is not seen as a great enabler here, except in terms of where it can be a game changer -- providing speeded up processes that provide greater accuracy will make waves in any market, and these are typically enabled by either reorganized information and staff management systems or by cutting-edge technology. An example of this was Citibank in Singapore, which impressed the local population with same-day card issuance. However, the innovation seems to have been a costly venture for Citi, and the bank now must follow through with loyalty programs that allow it to leverage the edge it gained.

Robust Product and Process Designs Required to Enter Emerging Markets
Local Stakeholder Knowledge Needed to Succeed in New Markets
Bring Banking Expertise to New Markets
The Right Solution For the Right Job