Citi Perspectives Fall 2019

New technologies offer potential cost savings, efficiency gains and control benefits for shared service centers (SSCs). However, corporates need to plan carefully to realize their goals. Cost, process optimization and standardization have long been the key drivers for corporates to implement SSCs. However, with the growth of new business models, changes in market infrastructure and new payment instruments, including instant payments and mobile wallets, and growing cyber threats, an SSC digitization strategy is becoming much more important for companies. There is growing emphasis placed on leveraging technology to add value by using innovations, such as robotic process automation (RPA) and predictive analytics. Digitization is gaining increased prominence in SSCs for multiple reasons. Payments and collections are evolving due to e-commerce and emerging technologies, including e-wallets, cards, and the internet of things (IoT). At the same time, innovation is opening up new opportunities; artificial intelligence (AI) can be used to help corporates to automate reconciliation processes, application program interfaces (APIs) can integrate bank functionality into ERP systems, and RPA can support repetitive tasks such as bank statement reconciliation and invoice processing. Perhaps most importantly, digitization offers significant savings — McKinsey research on 120 SSCs showed a 50% increase in efficiency in some back-office functions — while furthering the centralization and standardization agendas that have driven the growth of SSCs in recent decades. 1 44 Swati Mitra Global Sales Leader, Digital Client Advisory and Emerging Market Corporate Clients, Treasury and Trade Solutions, Citi 1 How shared-services organizations can prepare for a digital future (https://www.mckinsey.com/ business-functions/digital-mckinsey/our-insights/how-shared-services-organizations-can-prepare- for-a-digital-future) Shared Service Centers: Leveraging Digital to Drive Efficiency and Value Creation