Studies Of Leveraging Corporate Venture Capital For Banks To Promote Technology Innovation

Based on state quo of technological innovation in global banking industry, the paper study the method of Citigoup, which leveraging Citi Venture Inc. as an internal venture capital to promote technological innovation from the perspective of the theory of corporate venturing. Through case discussion and analysis, the establishment of Citigroup Venture Capital is found to be effective in helping Citigroup in dealing with the impact of technological innovation in the field of Fintech, which will prompting banks to change their own weak status in technological innovation and achieve the goal that becoming more competitive in the new technological environment. In the case of Citi Ventures, the leveraging of internal venture capital is proved to be effectively that assumes the function of technological innovation for commercial banks.This paper then analyzes how Citi Ventures achieves its goals to maximize revenue from Citigroup technological innovation in the aspect of organizational structure, investment philosophy, investment criteria and portfolio management. This paper argues that Citi Ventures brings important value for Citigroup including identifying new technology, enhancing innovation capacity, developing new markets, which can well support the implementation of digital strategy of Citigroup and let Citibank gain technical advantages in the field of customers service, internal operations and data analysis.Finally, based on the business and technical environment of commercial banks in China, we believes the successful experience of Citi Ventures in technological innovation are also applicable to Chinese commercial banks, and we therefor put forward suggestions to Chinese commercial banks from the aspect of organization, personnel institutional, strategic coordination, project management and incentives for better leveraging corporate venture capital to promote technological innovation. Then we further make recommendations for relevant regulatory authorities to improve the operating environment of commercial bank’s corporate venture capital.