Citi Perspectives Fall 2019

Citi Perspectives  | 35 34 | Treasury and Trade Solutions Technology-enabled disruptions In response to this dynamic environment, key players in the payments industry are investing in disruptive technologies and collaborating with specialized fintechs to make “instant” the new norm for consumer and corporate payments, whether domestic or cross-border. At Citi, for instance, there has been a significant focus on harnessing big data, deploying application programming interfaces (APIs), and leveraging advances in processing speeds to make real time a reality. Mobile devices and mobile apps too are central to Citi’s, and the industry’s, move toward real time, while the cloud has created a new rail for technologies that promote speed, convenience and scalability. With this as a backdrop, we see disruptive technologies accelerating change across three major facets of the payments ecosystem: clients and their business models, regulatory bodies, and payment solutions themselves. New business models, new payment demands Many companies are going through major shifts in the way they conduct business. They are adopting new business models. Their traditional supply chains are being disrupted. And their supply chains are increasingly more digital and more global. In the consumer goods sector, for instance, a growing number of enterprises are selling their products directly to consumers. They are cutting out traditional intermediaries, such as wholesalers and retailers, and instead using online stores and e-commerce marketplaces to reach consumers. As a result, they need to collect large numbers of smaller payments quickly, securely and around the clock. Similarly, the transportation and accommodation sectors have seen an emergence of new direct-to-consumer models. Shared economy models made popular by entrants such as Airbnb and Uber, for instance, have generated the need for a new payments paradigm as well. Faster payments are not just about providing ease and convenience to consumers, or accelerating collections. They offer tremendous opportunities when it comes to corporate payments, where, for example, just-in-time funding can speed up the release and delivery of goods from global trading partners. Real-time, account-to-account funds transfers also can enhance the management of liquidity among an organization’s business units or subsidiaries. Whether applied to a B2C or B2B payment scenario, instant payments are about so much more than increasing the speed of settlement — they are setting a new operational standard that inherently increases the velocity of global trade. Instant payment capabilities create exciting new opportunities for companies to build reimagined products, solutions and experiences befitting the digital age. Think, for example, of the competitive advantages of a ride-sharing company that can pay its drivers after each ride rather than on a weekly basis. Or indeed how much more compelling an immediate cash rebate is versus a traditional mail-in rebate. The opportunities are extensive. Instant payment capabilities create exciting new opportunities for companies to build reimagined products, solutions and experiences befitting the digital age.