Welcome and thanks to our presenters, panelists and participants for joining us today at Citi’s seventh annual Digital Money Symposium.
Since we held our first DMS in 2013, this conference has become one of the leading fintech events.
The theme of this symposium—“Tapping into the Flows of the Experience Economy” —captures the shift underway as we move toward a more deeply digital world.
For us at Citi, the needs and expectations of our institutional and consumer clients are becoming more alike.
Our clients expect banking to be as easy and seamless as getting an Uber.
Our clients expect easy, seamless access to our products and services through digital and mobile channels.
Our clients expect that we safeguard their data.
But as we all know, the act of creating easy, frictionless, and excellent client experiences can be complex and challenging.
We’ve found success in the experience economy through unconventional and new kinds of partnerships.
Partnerships that blend innovation with the ability to scale.
Partnerships that foster financial inclusion.
Partnerships that create new business models or strengthen old ones in new ways.
Partnerships that Blend Innovation and Scale
I’ll start with partnerships that blend innovation and scale.
A decade ago, Citi established a network of Innovation Labs around the world—in Dublin, London, Singapore and Tel Aviv—to facilitate a new way of working and thinking across our firm. At first these Labs focused on building our own solutions.
One of the most successful projects to come out of our Labs is a mobile version of CitiVelocity, our institutional trading platform.
Our CitiVelocity mobile app allows investors to trade on their tablets, smart phones and even smart watches as easily as they do at their trading desks.
More recently, however, we are finding success in partnership with fintech firms.
These partnerships are classic win-wins, not just for us and the fintech, but also for the client, who we want to make sure is the real winner.
On the one hand, fintechs gain access to our global network of more than a hundred million clients, our physical presence in nearly 100 countries, and our more-than 200-year-old trusted brand. We give them scale.
On the other hand, we gain access to fintechs’ agility, entrepreneurial culture, and new technologies. We get innovation.
...And importantly, our clients benefit. A great example of this is Citi Smart Match ®, which our Treasury and Trade Solutions business recently launched in collaboration with the fintech firm High Radius.
While payments get a lot of attention, unreconciled account receivables is a common pain point for many of our clients.
Citi Smart Match removes that pain point by applying artificial intelligence and machine learning to automate the matching of open invoices to payments for clients.
By working in partnership with fintechs like High Radius to bring ideas from conception to execution to market, we have delivered solutions that help us be the best for our clients. Everyone wins.
Partnerships That Promote Financial Inclusion
The second area I want to touch upon is how digital money through partnerships is transforming access to the banking sector. Foremost among the social benefits of digital money is its power to create new opportunities for the unbanked and underbanked to join our financial system. We see digital money as a powerful tool to promote Financial Inclusion.
To track progress on this front, in 2014 we launched the Digital Money Readiness Index in Partnership with Imperial College London.
The Index tracks the state of digital money adoption around the world and assesses its economic and social impact. It is used to guide policy makers, regulators and other constituents to upgrade their financial infrastructure to be compatible with a digital economy.
The sixth edition of that Index is coming out today, and will offer new insights into the readiness and degree of digital adoption of various countries and regions.
At Citi, we have a specialist team dedicated to developing solutions that expand access to financial services for underserved and low-income communities around the world.
For example, in the U.S., our Access Account is designed to serve the nearly 40 percent of consumers who want an account with no overdraft fees. We are able to provide this solution through digital channels today.
Another example comes from Citibanamex in Mexico. There, Citibanamex forged a promising cross-sector partnership with a leading telecom company, America Movil, to launch a simplified, low-cost bank account called Transfer, which you can open and access without ever having to go to a bank.
In 2017, we strengthened that platform by bringing in a third partner. Now through OXXO, Mexico’s largest chain of convenience stores, clients can open an account and transact, save or make payments digitally, using only their phones.
We are excited by how digital money in partnership with groups like OXXO serves as a tool to reach our communities with new products and services.
Partnerships That Create New Business Models and Strengthen Old Ones In New Ways
Finally, we are seeing partnerships create new business models and strengthen old ones. When we talk—as we will today—about building a new bank, all of these advances build on next-stage technologies that demand new ways of working, new ways of thinking and new business models to go with them.
As our digital economy advances, the payments space has become the latest hot spot for innovation and potential disruption.
While new innovations like blockchain hold promise and we are actively experimenting with them, when it comes to processing digital payments globally, we believe the current technologies and platforms are still the gold standard and will remain so for the time being.
Recently, the banking industry has made substantial progress in upgrading its infrastructure to make it suitable for the digital age. One example is SWIFT.
SWIFT is not a new business model, but a member-owned cooperative, a construct that has flourished for centuries, and where Citi has historically played a leadership role in driving our industry forward.
SWIFT has been doing that safely and securely since 1973, and to keep pace with the pace of the innovations we are celebrating today, it launched a new protocol, GPI, which appropriately stands for “Global Payments Innovation.”
GPI acts like the barcode on money movement, tracking a payment from, let’s say, a bank in Europe, to a beneficiary in South America routed through a bank in New York. GPI enables you to see where the payment is throughout the process.
At Citi, we are strong supporters of the SWIFT infrastructure and GPI because when we looked at the five factors we use to assess a payments protocol—cost, speed, transparency, convenience and security—GPI gets top grades on all five.
Another example where we are spending our time is on the Real Time Payments (RTP) platform developed by The Clearing House, which I currently chair. RTP is the first new payments system to come along in the U.S. in 40 years.
It is being strongly supported by member banks because it offers a clear path to straight-through processing and lower back-office costs.
In addition to The Clearing House’s RTP platform in the US, around 30 countries globally have moved to real-time payments; and we intend to participate in all of them where we are present.
That might sound a bit like “Back to the Future,” but from our point of view, reinventing the wheel for its own sake isn’t real progress.
Finally, these digital platforms provide a huge opportunity to forge closer connections between the consumer and institutional sides of the industry and our own solutions. As an example, this week, we announced plans to build a consumer payments solution for institutional clients, in partnership with Mastercard and other fintechs.
Today we will hear a lot about our theme: “Tapping into the Flows of the Experience Economy.”
We agree the experience of banking should be as painless and seamless as hailing a cab or ordering a pizza.
As players, leaders and first-movers in this space, we need to do everything we can—and more—to ensure that Digital Money as it evolves, does so in the best interests of both our clients, and our communities at large.
We need to ensure that while these innovations benefit business, they also deliver a better quality of life to millions who need them through Financial Inclusion.
We see the solution to these challenges and opportunities to be partnerships among the new and existing players in the market, leveraging the strength of each other.
In this digital world, we are moving toward “Digital Money” at an unprecedented pace. We need to ensure that we’re solving real-world problems by creating real-world solutions.
Thank you all for being here and please enjoy the rest of what promises to be an exciting, provocative, and informative day.