Citi Perspectives Fall 2023: Transforming Treasury

28 | Treasury and Trade Solutions Citi Perspectives The future is instant: How partnerships and purpose are driving Latin America’s payments revolution In recent years, instant payments have exploded across Latin America, supported by new technology like embedded QR codes, extensive bank application programming interfaces (APIs), inventories and e-wallets. The unbanked are moving into the formal economy and cash use is steadily falling encapsulated by flagship innovations like Brazil’s Pix, the Central Bank’s instant payment scheme, only launched in 2020 and now processing around 2.5 billion transactions a day. Elsewhere, mandatory open banking regulation that permits financial institutions to share customers’ financial data has allowed nontraditional banks to participate in the financial system, fueling growth of the fintech sector. Central Banks are laying the foundations for digital currencies and venture capital is pouring into the region. According to the Association of Private Capital Investment in Latin America, LAVCA, venture investment reached $15.7 billion in 2021, more than three times 2019 levels and more than the previous ten years of venture investment combined. “We have seen incredible progress in the last few years,” says Steve Donovan with a ringside seat on the pace of change as Citi’s Latin America Treasury and Trade Solutions Head for the last eight years. “I would say Latin America has not just caught up with the rest of the world, it’s actually leading in many aspects,” he enthuses, listing the multiple digital payment rails Citi now offers clients from supporting regional businesses to sell directly to end-consumers by automating payment journeys and eliminating the need for cash, to offering real-time digital payments to employees in the gig economy, paying them straight into digital wallets or bank accounts. Globally, Citi’s annual technology spend on Treasury and Trade Solutions is around $1 billion. The funds have been ploughed into improving the bank’s existing payment pipes, building out instant payment infrastructure, and investing in Citi’s APIs and front-end client connectivity. State of the art products include CitiConnect®, its API connectivity platform which houses one of the region’s largest portfolios of APIs, supporting clients with a 24/7 exchange of transactions and data.