World's best bank for transaction services 2016: Citi

Creating a platform that provides a coherent global service while keeping distinct regional variations has rewarded Citi with a year of further success in transaction banking.

Awards for Excellence 2016

AfE 2016 logo-196 135  
 Also shortlisted:
Bank of America Merril Lynch

BNP Paribas
HSBC 

 View full 2016 results

It is no use implementing digital tools if a bank does not realise the full potential of its platform. Digitisation needs to involve more than replacing like for like. Citi has recognised this need for genuine flexibility and thinking outside the confines of what it has done before, developing a digital product suite in transaction services that other competitors cannot yet match.

Citi’s treasury and transaction services business has exercised a truly international approach, creating platforms which can be used and adapted across continents. Creating this seamless experience through the CitiDirect BE for the users of its mobile solutions in particular has yielded results.

Citi has won some impressive mandates in the last year, on-boarding Samsung Electronics for RMB netting, and conducting the first intercompany RMB cross-border netting RMB transaction in the process. Etihad Airways has also chosen Citi for its cash management operations, leveraging its fintech to reduce its operating costs.

The bank is confident it can continue to grow its trade and transaction services business, aiming to build on its position of $2 trillion-worth of flows each day, transacted in 135 currencies. The business recorded 6% growth in 2015, seeing revenues of $7.8 billion.

Its mobile banking capabilities have developed strongly in the four years since launching. In February 2016 the bank hit the $1 trillion mark for transactions through mobile devices. The use of CitiDirect BE has continued to rise, as the bank recorded a 12% year-on-year increase in transactions, and a substantial 86% increase in users.

Naveed Sultan, Citi’s global head of treasury and trade solutions, says: "Our tablet and mobile channels have been wholly embraced by the clients. Despite only being launched four years ago we are already seeing trillions of dollars being transacted across mobile devices."

Giving clients greater control of their own payments structure has also helped the bank to a winning year. The creation of a Payments and Trade Advisory tool allows for specific payments to be followed along the chain, much like a parcel tracking service. It gives a greater degree of control over a payment by enabling the recipient to see when it will arrive, and to plan their cash flow accordingly.

Sultan says these advances represent the next level of developing digital capabilities: "We are in a phase now of seeing the evolution of individual products. This covers the whole portfolio. It is not just looking at effectively sending payments, but how we can improve the processes of settlements. Through the Payments and Trade Advisory tool clients can follow their payments to ensure they are on track."

Citi's focus is on making clients’ interaction with the bank as streamlined and stress-free as possible. "Launching the paperless service had made account opening and maintenance considerably less strenuous for the clients," says Sultan. "It has helped us to deliver a better quality of service in over 100 markets. As a bank we have to make sure the on-boarding process delivers a good client experience." The bank can now boast 97.5% of transactions being completed with straight-through processing.

Naveed Sultan-160x186
Naveed Sultan,
Citi
Sultan says that while the processes have reached an impressive standard, they still have further to go. "Although it covers a multitude of different transaction types, we have been able to reach a significant level of straight-through transactions. Citi acts as a dollar clearing bank for many of the large banks in Europe. Many of the transactions will be bill payments," he says.

"Processing the transactions without the need for human intervention helps prevent fraud, and is more productive. We endeavour towards it being 100% straight-through."

One of Citi’s strengths is being able to tailor-make its global platform for the particular needs of specific regions. That, as well as the pullback of some competitors from the global business, has helped win the bank some big mandates, including Shell’s Western European cash business.

Citi has integrated its platforms with M-Pesa in Kenya. Transactions made from corporate accounts are transferred into payment files submitted to Safari.com, which facilitate a near real-time credit to the mobile accounts of beneficiaries. Last year the bank also became the first in India to offer a multi-bank sweeping facility. Managing cash flow across numerous institutions has been a problem for corporates in the country.

Sultan says the results come following a number of years of expansion in the business. "Our Treasury and Trade Solutions franchise has evolved significantly over the years, showing consistent growth in revenue and operating margin on a year-over-year basis. It has become both fundamental and strategic to Citi’s business model," he says.

"We are creating real value for our clients as we continue to invest in this business and leverage on our global network."