Vikram Pandit, CEO, Citigroup
Washington, D.C.
As prepared for delivery
Tuesday, June 12, 2012

Remarks by Citi CEO Vikram Pandit at the Announcement of the USAID (U.S. Agency for International Development) -Citi Mobile Money Accelerator Alliance

Good morning.

The digital revolution has been the greatest spur to economic growth in our lifetimes. Technology has reduced the cost of moving and exchanging information to near zero. It introduced all kinds of efficiencies and opened up new avenues for products and services undreamed of just a few short decades ago.

The mobile revolution will be for banking what the digital revolution was to the broader economy. And mobile money has the potential to become one of the most powerful engines of economic development in history.

One of the most crucial issues facing the world today is the vast number of people without access to basic financial services. These people are effectively cut off from the global economy. They face more limited access to jobs, goods, and services and they are forced to pay higher prices for the necessities of life.

Nearly two billion people in the world who lack a bank account have a mobile phone. That's our window of opportunity. Mobile payment systems can connect these people to their own economies and to the world economy—some of them literally for the first time in their lives.

In any network, the "last mile" is always the hardest and most expensive to connect. In the payments realm, the last miles is also were opportunities for theft, corruption and misuse abound.

Mobile technology allows us to leapfrog right over the last mile. For customers in remote or rural locations, their phone can serve as their local branch—a branch they carry with them wherever they go.

But this mobile revolution is still in its beginning stages. Only about 100 mobile payments systems are in place around the world. Of these, few have reached critical mass of users in their countries. We at Citi and USAID believe that we can help speed up the adoption of this technology. That, in a nutshell, is why we are standing together today: to help countries harness the power of mobile payments to create jobs, spawn new enterprises, fuel economic growth, prevent corruption and lift millions out of poverty—particularly in the emerging markets that are critical to the growth of the global economy

Bold leadership from governments, banks, mobile network operators and other companies can create this new mobile ecosystem. Success will require a critical mass of participants. It's a simple matter of scale. If only a small percentage of consumers use mobile payments and a small number of businesses accept them, everyone else's incentive to continue using cash will remain strong. The more widespread mobile payments become, the faster people will adopt them.

The problem today is cacophony. Everyone—in industry and government alike—is singing from different song sheets. We need to replace the cacophony with a symphony: everyone showing up at the same time, with the same sheet of music and playing in harmony.

USAID and Citi bring some unique strengths to this effort. I will let Raj describe what his organization brings to the table but from Citi's perspective, we're impressed by USAID's deep knowledge of the plight of the unbanked and their passion for innovation. They, of course, also bring relationships with the world's governments and the convening power that only a major American federal agency can offer.

Citi brings to this effort, first, the banking sector's premier global network. We are physically present in more than 100 countries and do business in more than 160. No other bank comes close. We aspire to be the world's digital bank and are making great progress toward that goal.

Citi currently provides consumer mobile banking services in 39 countries, with more to come. We are building new partnerships, for instance launching the Google Wallet in the U.S. In Latin America, we're a partner in a joint venture called "Transfer," which will offer mobile wallets to America Movil's 241 million customers.

And of greatest relevance to our effort today, we have begun to connect our payment pipes to mobile operators. For example, in Kenya, Citi enables companies and NGOs to make compliant and secure payments to M-Pesa's mobile customers.

In the institutional area, Citi has already moved some $4 billion in institutional funds through mobile phones. That's a small share of the $3 trillion we process every day around the world, but the important point is the trend line: we've done that in only nine months.

Citi also brings to the table a strong track record of working with governments around the world, including throughout the emerging markets. The U.S. government, for example, is one of our largest and most important clients. From processing passports for the State Department to administering approximately $45 billion in annual flows for various federal agencies, including the Treasury Department and the Department of Defense, Citi is proud to work with our government and serve the American people.

Together, USAID and Citi are committed to engaging governments, regulators, industry and other key participants in order to improve dialogue and understanding of what is and isn't working in global mobile money ecosystems. We will then, together, push on the accelerator toward adoption. Our goal is that, in five years, one billion people around the world will be connected to a mobile payments system. That's ambitious but achievable.

To begin, we've identified nine countries where we see significant and immediate opportunities for progress: Colombia, Haiti, Indonesia, Kenya, Peru, the Philippines, Tanzania, Uganda, and Zambia. We will expand beyond these countries as we build success and momentum.

This coming Saturday, Citi celebrates our 200th birthday. I'm particularly proud of Citi's historic role in the democratization of finance. Banking originated as a niche service for the rich. Over the past two centuries, Citi has led the way in expanding the reach of banks to ever larger populations. Among the many innovations we either invented or popularized were the individual savings account, the credit card, and the ATM—all of which brought financial services within reach of everyone. This alliance with USAID is a great way to continue that legacy.

Thank you.

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