2023-Public-Sector-Perspectives

Co-creation can be powerful in key focus areas for public sector clients, helping to address challenges such as transparency, climate transition and inclusive finance. Typically, co-creation follows the following steps: • Understanding and aligning on mutual innovation focus areas. For public sector clients, these might include digitization, business continuity, reaching the unbanked, CBDCs, etc. • Deep dive on mutual focus areas bringing together relevant specialist teams from Citi and the client to share insights, current initiatives and investment highlights, and discuss potential emerging technology capabilities. This session identifies areas for co-exploration with clearly defined next steps. • For each area identified, assigned key owners from both Citi and the client leverage various techniques such as problem and solution hypothesis, jobs to be done, user journeys, etc. During the solution concepts stage, specialist Citi teams (such as Innovation Labs, the Digital Assets team, etc.), as well as Citi investment portfolio companies or fintech partners become involved where relevant. • Following a mutual decision on potential co-creation solutions and organizational alignment, delivery teams work to define, design and deliver a pilot or minimum viable product. The benefits of co-creation are vividly displayed in a solution developed with the Inter-American Development Bank (IDB), a multilateral development bank focused on improving lives in Latin America and the Caribbean. It sought to enhance its cross-border payments processes in order to reduce costs: its wire payments were expensive, while returned payments added costs due to intermediary bank fees. IDB had no direct traceability of the status of disbursements or the fees charged by intermediary banks. Nor did it have control over processes or fees applied to transactions. IDB’s beneficiaries, mostly public sector and governmental organizations in Latin America and the Caribbean, had no easy way to trace transactions and faced expensive bank fees. To address these pain points, during 2020 and 2021 the IDB worked closely with Citi’s Innovation Labs on a cross-border payments proof of concept. Together they successfully executed cross-border payments originated from IDB’s headquarters in Washington D.C. to a recipient in the Dominican Republic, leveraging tokenized money through CitiConnect for Blockchain and IDB’s LACChain Blockchain Network. “For the proof of concept, the IDB deposited funds denominated in dollars in a Citi account, which were held, tokenized, and transferred using digital wallets. After tokenization, funds were converted to Dominican pesos based on a Citi-provided exchange rate. Exchange rates, payment status, and fees were traceable and transparent at all times as the transaction could be checked in the LACChain Blockchain,” explains Marcos Allende, IDB Specialist in Blockchain and Technical Leader of LACChain. Similarly, in 2020, Citi partnered with BNP Paribas, DBS Bank, Deutsche Bank, Standard Chartered and Ant Group (the parent of Alipay, the largest mobile payment platform in China), to launch Trusple, a blockchain platform for international trade transactions that targets SMEs and banks. International trade can play an important part in increasing opportunity, especially for SMEs in developing countries, and accelerating economic development. SME buyers and sellers without established relationships can often face delays in shipments and payment settlements, which may place pressure on their finances and cashflow. Trusple tackles this challenge as well as helping banks support SMEs’ global trading by leveraging smart contracts powered by AntChain to automate the trade transaction. The platform uses “smart” contracts to automatically update information on a trade on the platform, including progress on delivery. It also aims to integrate bank-offered trade finance including automated bank payments using smart contracts. 62 Emerging Technology for Emerging Markets: How Innovation Can Drive Sustainable Development