Citigroup head discusses challenges of banking on a global perspective

Jonathan Larsen, head of retail banking at Citigroup, talks about the challenges of what it really means to manage on a global level

PUBLISHED : Saturday, 08 September, 2012, 12:00am
UPDATED : Saturday, 08 September, 2012, 2:29am

It is relatively easy for a local bank manager to keep in touch with customers around a district. But imagine multiplying that task by 4,600 branches and across 40 countries.

That is the job Jonathan Larsen took on when he was appointed to the additional role of global head of retail banking for Citigroup in June. He was already heading the US bank's consumer business in Asia. Citigroup has 27 million clients, including at 700 branches in Asia, where it is known for its wealth management services and credit-card business.

Born in Geelong, a town in the Australian state of Victoria, Larsen is the son of two university teachers. His father taught music, and his mother psychology.

After he graduated from the University of Melbourne, Larsen joined an insurance company and worked at its banking arm in New Zealand. He then moved to global management consultancy Booz & Co. In 1998, he joined Citigroup and has held various roles across the region, including as the bank's country head in Singapore. In late 2009, Larsen was named to lead the consumer business and relocated to Hong Kong.

Larsen, who is married with a 13-year-old son, took a break from banking to talk to the South China Morning Post about what it is like to manage staff divided by vast distances and cultural norms.


Why did you become a banker?

I studied art history, English literature, philosophy and music in university. By the time I had finished, I realised that I didn't want to spend my life in academia, so I took a job in the commercial world. I joined an insurance company in Australia in 1987 and ended up working in its banking arm. I have been working in banking one way or another ever since.

How do you compare banking now with when you first joined?

Things have changed significantly over the past two decades. Banking has become far more competitive and more dynamic. Asia has also become far more significant in the global context - the largest wealth management market in the world, the largest market for [initial public offerings] in the world, and, increasingly, some of the largest consumption markets in the world. Technology has transformed how we do business. As an example, mobile and internet banking were only dreams in the late '80s or early '90s.

What are the challenges of managing a global retail banking business with operations in more than 40 markets?

There are very important differences in how you manage an individual country as opposed to a region or global business line. As a country head, you have one set of competitors to worry about, one set of macroeconomic variables, one regulatory framework and a largely homogeneous set of cultural norms to deal with.

At a regional level, for example, in my role as head of the Asia consumer business for Citibank, all of these variables are multiplied. You have to make sure you have the right strategies and the right leadership in place at a country level - both of these are very important. Additionally, you have to engage in cross-country issues that will drive value across the region. I still get involved in quite a lot of operational details but I am primarily relying on our country-level business managers to drive the business day-to-day.

Now, as the global retail banking head, I have to be managing issues at a strategic level that will shape the business over the next two to five years, to set the direction for the regional heads to execute in their respective markets. I can't possibly be involved in the day-to-day management of every country or even region.

How do you cope with the issues of managing staff and customers with different languages and cultures?

Language is not really an issue. For the most part we communicate in English. Where that doesn't work, we use translators. But there are challenges when you are operating in 40 markets, each with different local dynamics and, of course, cultural norms. It is key that we have strong local management and can trust the local team to deal with local issues. There is some strain for those of us that have to travel extensively across time zones, dealing with jet lag, etc. But as long as you are sensible, this is manageable.

Different markets have different cultures. For example, young graduates who work for us in China often have a very short-term view of what is good for them from a career perspective, and as a consequence tend to change jobs frequently. This is usually not in their interests and the market will mature, but this is how it is right now. Hong Kong, as another example, has an extremely strong work ethic and a tremendous level of executional discipline. This allows us to get things done very quickly and efficiently.

In terms of investment approach, Hong Kong investors are more mature and hold a more long-term view as they have experienced many economic cycles and crises. The mainland clients focus more on short-term opportunities and tend to expect investment returns to match the rise in property prices over the last five or so years.

What do you do to relax amid your hectic work life?

I play clarinet and piano. I also enjoy sailing. With its 200 islands, Hong Kong is one of the best places in the world for sailing.