MANY big Western banks are looking to China to shore up growth as business slows in more developed economies. Citigroup is no exception.

The third-largest US bank by assets said earlier this year that it plans to double the number of outlets in China to 100 in the next two to three years. It already operates the fourth-largest branch network among foreign lenders on the mainland.

The future looks bright to Jonathan Larsen, Citi's new global head of retail banking, who is based in Hong Kong. The retail team he leads produced US$8 billion of revenue last year in the Asia-Pacific region, now the biggest wealth management market in the world.

Larsen joined Citi in 1998 and has held various leadership posts across the Asia-Pacific. He was appointed CEO for Citibank Singapore in 2005, and took over Citi's consumer business across Southeast Asia two years later. Prior to that, he was involved in the expansion of Citi in Korea, Japan and China - the latter in the strategic alliance between Citi and Shanghai Pudong Development Bank in 2002.

Before joining Citi, Larsen worked at management consultancy firm Booz, Allen & Hamilton. He began his banking career with National Mutual Group in Australia, after graduating from the University of Melbourne.

Sitting in Citibank's newly opened flagship office on Nanjing Road W. last month, Larsen shared his thoughts about the evolution of retail banking in China.

Q: You are the first Citi global manager to be based in the Asia-Pacific. How do you plan to approach such a diversified regional market in your growth strategy?

A: The good news for us is we have quite a diversified geography and strong franchises. All our countries are quite profitable here in Asia. The exceptions are the markets we've entered more recently. China is still an investment for us in retail banking.

There are very different market conditions across the region, from China to India, from Vietnam to Singapore, from Hong Kong to Australia. The same strategy doesn't necessarily apply equally in all places. So we have to have a local element strategy that shares some common features.

In the region, we have the largest wealth management platform of any competitor. That's very significant because Asia is now the largest wealth-management market in the world, measured by the number of high-net-worth individuals.

We operate in 14 markets, and I think we have a tremendous brand for serving the needs of affluent clients. This is going to be a very important growth engine for us for the next five to 10 years and beyond that, as wealth continues to concentrate in Asia, as the middle class continues to expand, and, of course, as Asia economies continues to prosper.

The second really important business for us is our credit card business. We just launched our credit card in China. The credit card market in Asia is very large. Think about what's happening in Asia. You've got a growing middle class. There are two things that middle-class people will do. One is they will consume more. As a credit card issuer, it's a fairly useful position to be in. Secondly, they are going to invest more, and save more. So being the wealth management provider is also very strategic.

Q: Could you discuss the trends you see for retail banking in the next 10 years? How will technology reshape the operations of traditional branches?

A: Look at retailing. Online is converging with off-line. Retailers increasingly think about serving their customers by offering a hands-on experience in their stores.

A lot of clients want to peruse merchandise in stores before they buy. Of course, when you are in a store environment, you have the opportunity to help clients to understand the choices available to them more easily. And you can use tools - like video, touch-walls, touch-tables, interactive iPad tools, and so forth - to showcase products that you sell in a way that might be more difficult if you just left the customers to their own with the mobile devices online.

So the role of the retail outlets is changing quite significantly. It's much more about interactivity.

It's much more about a place where clients can get information, and staff can interactively make sales.

Let's transfer this back to banking. If you look at the branch we have here on Nanjing Road West, this is very much the model that you will see in the future.

You walk into the bank and the first thing you see is what we call our sales walls. They basically examine our product range. You can page through on touch screens to see details of the range of services we offer.

Our staff - we call them "enablers" - can have conversations about a particular client's needs. And they can turn around and go over to our Internet screens embedded in work benches and open an account or perform any other transaction they want.

What's much more interesting is that we don't have tellers, so the branch is not about standing in line waiting to be served. It's about us understanding your needs, and you exploring the options available to meet those needs, then finding the solution that works for you. We work with clients, whether it's a loan or a savings plan, or a wealth management relationship, to make sure that it actually meets their needs.

We are actively using the technology that is available. We just launched the new iPad application for Citigold Private clients. It allows them to access a wide range of research reports. In the past, we sent paper copies to our clients, which is very time-consuming.

We think the conventional branch will disappear over time. Transactions don't really need to be done in branches anymore. They can be done electronically.

Q: What restraints imposed by the Chinese government on foreign banks make retail operations on the mainland more difficult?

A: There are branch license restriction and other product restrictions. I think the point is that we understand that regulators here have a particular agenda aimed at opening up the financial sector gradually. We respect that. Obviously, we will build up our business within that framework.

The regulators will open up the market as they see fit. I think the important point is that technology is actually moving ahead of the regulations. In our business today, something like 98 percent of our transactions don't happen inside branches. They happen through other channels: phone, Internet, mobile, ATM machines and so forth.

I think the traditional branch is a dinosaur and will become extinct.

Q: How would you describe the retail banking industry in China now and what is the relationship between foreign and domestic banks?

A: The domestic market is dominated by the major Chinese banks. The industry remains very traditional in the way it operates.

I think foreign banks tend to be playing a niche role. We don't really try to compete directly with local banks. We are offering complementary services to our clients, to people who have global needs and to people who want to benefit from innovative interaction with their bank.

I think people respect the very high standard of care we give our customers. We make sure that when we offer products, we have a very big process evaluating these products to make sure that they are suitable. We have a very high standard of diligence. That's really why people come to us.