Citigroup’s split could disrupt IT rationalisation

Citigroup will have to unravel integrated ITwhen it splits the company up to separate strong and weak parts of its business.

The...

Citigroup will have to unravel integrated ITwhen it splits the company up to separate strong and weak parts of its business.

The breaking up of the financial services giant will require integrated IT to be separated and IT skills to be redeployed.

Higher risk consumer finance and securities businesses are being separated from its global commercial banking operations in an attempt to ensure its survival, according to the Financial Times.

Parts of the business will be sold off when the economic conditions improve. When these businesses are acquired the IT that underpins them, such as huge customer databases, will be important to the acquirers.

Citigroup has had a business model known as "universal banking" for about a decade, where customers can get all their financial services from one place. This has involved the rationalisation and sharing of IT resources.Citigroup was created in 1998 when Citicorp merged with Travelers. The firm has since been building an organisation capable of serving ordinary savers as well as large businesses.

As a result, splitting the business up will be a huge challenge, said Bob McDowall, analyst at Towergroup.McDowall said Citigroup will have to "unscramble and segment integrated IT."

"If it wants to sell off parts of the business and realize value it will have to sell the technology assets and people with skills with it. They are going to have to extricate these parts of technology and the people that support it."

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