Citibank is shrinking its footprint in China as it looks into expanding its digital banking network.
The bank's move to shutter some of its branches comes as it sees a shift in the banking preferences of Chinese consumers. According to Reuters, 95 percent of Citi customers chose to use banking services online over visiting a branch.
Seeing the decline of foot traffic in its bank locations, Citi has shut down four of its branches in mainland China in the last year and now sees its network of 46 branches spread out across 13 major cities as adequate to serve its customers.
"While the branch network remains important in China, the growth in digital means we are adapting fast. It's a bricks-and-clicks strategy designed to ensure we remain relevant to our clients," said James Griffiths, a Citigroup spokesman in Hong Kong, in an interview with Reuters.
Citi, which reportedly surpassed the $1 billion revenue mark in China a couple of years ago, marks the onset of the changing dimensions of Chinese consumer finance. Increasingly, Chinese consumers are picking the convenience of modern FinTech solutions over traditional banks.
Today, FinTech companies in China cover the length and breadth of consumer financial needs with a range of offerings, including asset management, crowdfunding, credit card processing and P2P lending.
"In China, the big story is that a lot of these FinTech innovators are scaling to such a degree that they're the core financial relationship that a lot of particularly young Chinese consumers have," James Lloyd, Asia-Pacific FinTech leader at consulting firm EY, told Reuters.
"The proposition nowadays for international banks in China and for some of the domestic banks is having to compete with the nonbanks that own that customer relationship end to end," Lloyd added.
Citi, however, is not the only bank to turn its sails to profit from the digitization of the banking industry in China. HSBC, which has over 170 branches across China and makes for the largest foreign bank in the country, recently realigned its position in the market, as Reuters pointed out.
On April 1, the bank released its "Asia Digital" strategy report, which highlighted its plans to put special emphasis on expanding its presence through digital channels rather than physical locations.