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Article10 Dec 2022

Transformation is on the Rise: The New CitiDirect Experience

This is the third in a series of articles by Citi Treasury and Trade Solutions experts that explores a transformation that is underway in corporate banking platforms and ecosystems.


David Coutinho,
Global Head of Digital Channel Capabilities, Treasury and Trade Solutions, Citi

How Microservices-based Architecture is Revolutionizing Banking Platforms

The framework of a bank’s electronic platform determines its ability to build and scale for the future. It also has a huge bearing on how and to what degree businesses can integrate their systems and technology with their banks’ to further their own digital agendas. New banking frameworks built on API-connected microservices are a game-changer — for banks and their clients.

Enterprises today put demands on their bank’s transactional platforms that are dramatically different from 15 years ago.

Electronic payments weren’t really a “thing” back then and there the vast array of electronic, mobile and instant payment options that exist today were in their infancy or had not yet been developed. By today’s standards treasurers and cash managers operated in an environment of low complexity. They could handle most of their banking and transaction needs using their bank’s proprietary banking platform.

Fast forward a decade and the scene is totally different. Enterprise systems and treasury workstations handle large volumes of transactions and connect directly to banks’ systems to exchange data. The internet has spurred online commerce and electronic payment systems. Global trade and commerce have accelerated, and the need for efficient crossborder capabilities has grown.

Travel forward a few more years to today and a whole new zeitgeist of electronic commerce and online marketplaces has emerged, on a global scale. Digital natives have taken a prominent place on the business landscape. Rideshare and restaurant delivery businesses, for instance, have built entire app-based businesses that require transactions to be completed instantly. Plus, these non-traditional businesses are scaling into new markets, domestically and globally, at much faster rates than has traditionally been achieved by brick-and-mortar companies. In addition, treasurers’ jobs have become more strategic. There is a greater focus on tapping technology to increase speed, efficiency and control, as they envisage real-time cash and liquidity management.

Out with the old, in with the new

What does this evolution mean for wholesale banking providers?

If they want to keep pace with their clients’, and quite honestly to survive, they must totally transform the architecture of their banking platforms. They need to create a framework that is flexible enough to handle even greater payment volumes, types and system and to be able to handle real-time processing and data demands. The systems and processes also must be nimble enough to accommodate legacy and cloud-based systems, for example, and to become a more integral part of their clients’ businesses.

Today, unlike in the past, banks are being called on to embed their processing capabilities directly into a client’s operations. Take the example of the payment and collection needs of an app-centric digital native company. A company that has been operating under a more traditional business model sends files of payments at specified times to the bank for batch processing.

With the digital native, however, the bank connects directly to the company’s operations to facilitate the immediate execution and processing of individual transactions as they occur, based on payees simply pressing a button on an app, for instance. In this new paradigm, banks are no longer operating outside their clients’ businesses to support them but inside them, if you will. They’re operations and processes are more tightly coupled and interoperable than ever before.

In this new environment, a bank’s infrastructure must be resilient enough to handle unpredictable volumes and also be available 24X7, 365 days a year. It can’t afford to take down its system for a day or even a few hours to make upgrades or do routine maintenance if is going to part of a business that is “always on”.

Microservices: Roadmap to the future

The key to achieving this type of agile hyperconnectivity is microservices.

Microservices enable banks to replace their embedded platforms and transaction models with ones that align better with the digital demands of today, and tomorrow. Forward-looking banks are in the process of completely reengineering the framework of their platforms around a microservices-based architecture (MSA) that makes it possible to build, scale, and integrate their services and capabilities faster, and in seemingly endless ways, with both third parties and their clients.

Citi, for example, is investing heavily in a large-scale transformation of its CitiDirect® banking and cash management platform. A global team of developers is replacing a legacy framework of tightly coupled applications with a flexible cloud-capable, microservices-based modular structure.

Whereas Citi’s legacy core banking architecture is built on a rigid framework designed to accommodate multiple point-to-point integrations and batch processing, its microservices-centric platform is more adaptable to clients’ fast-changing banking and transactions needs.

Using a microservices approach, developers can design a highly scalable platform by combining different parts of the bank’s extended technology stack into discrete patterns or services. Think of them as high-tech Lego® blocks. Loosely coupled blocks, or modular services, can be built, deployed and scaled independently. They communicate with other services and systems via standard application programming interfaces (APIs).

A framework designed around microservices makes it easier for the bank to organize its capabilities and services in a way that reflects the needs of clients and how they want to use them, rather than how the bank builds them in its organization. Plus, API-enabled services a can be scaled seamlessly to meet fluctuating demands.

Another way to think about the advantages of a microservices framework is to compare it to a package delivery company that maintains a fleet of planes to transport packages from airport to airport. Once the company anticipates reaching a volume of packages that exceeds its planes’ capacity it could invest in a new plane to expand its capability. This, however, requires a huge capital investment and a lot of planning and forethought to project when the time is right to purchase a new plane. On the other hand, if the company could deploy an army of drones instead, packages could be carried from doorstep to doorstep, at a much lower cost and faster. In this case, drones, similar to microservices, offer cost efficiencies, scalability, flexibility and speed to market.

A focus on innovation, and the future

As Citi reinvents it’s banking platform from the ground up, hyperconnectivity and microservices are anchoring technologies, making it more adaptable to businesses’ needs well into the future.

At the same time, a wide range of new technologies, including data science, artificial intelligence, machine learning, robotics and real-time telemetry, to name a few, are also being integrated with a new back-end framework to reimagine users’ frontend experience. The result is a user interface that is simpler, more intuitive and customized to users’ different personas, roles and actions.

No one knows with certainty what companies’ banking and transaction needs will be in the future. But, one thing is for sure. Microservices will enable banks to meet, and exceed those needs. Citi is among the first banks to make a major commitment to a microservices-centric standard that will enable companies, and their treasuries, to advance their own digital agendas with greater ease, speed and efficiency.

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