Citi Perspectives Fall 2023: Transforming Treasury

18 | Treasury and Trade Solutions Citi Perspectives Q. How is the payments landscape in EMEA evolving? A. The march toward instant payments and 24/7 continues. In Europe, while the SEPA Instant scheme has been operational since 2017, adoption has been limited across payment service providers. To counteract this draft legislation is now looking to make adoption mandatory for all participants in the Eurozone, which will only increase the scale and usage of instant payments in Europe. Elsewhere in the region, countries like Egypt, Bulgaria and Tanzania are looking to roll out mandatory instant payment schemes. Where mega trends are concerned, the rollout of ISO 20022 is a very significant transformation, particularly in Europe and Africa. For years, we have been on a legacy format that limits the messaging and information we can provide to our clients, so this upgrade is very important. Openness is another trend —we are seeing more frameworks emerging around openness and open banking in countries across the region. UK and Europe have been there for some time even if adoption needs to scale, but we are now seeing open banking frameworks appearing in more countries, including in the UAE and Saudi Arabia. Other developments include the arrival of intra-regional cross- border schemes, such as BUNA and AFAQ in the Middle East and Africa, the Pan-African Payment and Settlement System, and P27 in the Nordics. We are also seeing market infrastructures become more sophisticated in terms of the capabilities they are adding. At the same time, we are seeing digital native platform companies looking to expand their offerings and services into the financial services space. Q. What sort of developments do you expect to see in the coming year? A. I think the drive to increase the scale and resilience of the overarching infrastructure continues to be a huge trend, alongside the growth of e-commerce. Digitalization and the reduction of cash continues as a trend, particularly in Africa and the Middle East, where cash continues to be widespread. It is not going to disappear tomorrow—but the evolution of digital wallets and instant payments will continue to drive the reduction of cash. I also think we are going to see an increase in the use of APIs by our corporate clients. That dynamic connectivity enables different use cases that companies can take advantage of, from pre-validation to real- time reporting. Open banking will continue to mature, especially in Europe, while we are likely to see continued exploration and use cases around digital assets and the underlying technologies. And following the move to ISO 20022, structured data is going to be an important topic. Payments in EMEA For years, we have been on a legacy format that limits the messaging and information we can provide to our clients, so this upgrade is very important. Mark McNulty EMEA Head, Payments and Receivables, Citi Treasury and Trade Solutions