Citi Perspectives Fall 2023: Transforming Treasury

30 | Treasury and Trade Solutions Citi Perspectives Most of Citi’s clients already use APIs and Donovan predicts the next wave of investment will be in enterprise resource planning (ERP). Witness Citi client Rappi, one of Latin America’s largest online delivery groups’ recent adoption of an API solution providing ERP connectivity to enhance visibility and control and make use of multicurrency options in some markets. Rappi’s treasury function can manage payments from initiation through to proof-of-payment and back. In 2021 the company processed around 900 payments per minute (up from 150) across the nine countries it operates in the region while a centralized and centrally funded treasury has transformed transparency and efficiency. Partnerships Citi has never perceived Latin America’s vibrant fintech scene as a threat. Across Latin America, their success and growth directly benefit the bank’s own commercial banking operations. In addition to being clients, fintechs are also valuable collaborators, working together with Citi on new technology and ways of doing things. “When you are open to engaging with nontraditional financial services, you can learn a lot,” says Donovan. “It’s mutually very beneficial.” Fintechs’ expertise center around developing so-called last mile payment solutions — completing the final leg of a digital payment toward consumers. Such is fintech’s expertise here, Citi has reduced some development of its own last mile solutions and Donovan spends much of his time overseeing fintech pitches and meeting entrepreneurs in different countries, understanding their technology, and exploring commercial agreements around last mile collaborations that include equity investments in some companies. “I meet with many fintechs assessing their ability to supplement and add value to services we already have on the platform or assessing if they have something different. I love the insight the process offers and the access it gives to the next generation of professionals.” The collaboration model flourishes given fintechs are typically vertically focused and highly skilled at one thing, he continues. In contrast, Citi’s expertise is horizontal, able to do a myriad of different things. In this way, fintech expertise adds to what the company has and what it needs to build in the future. Citi doesn’t insist clients only conduct business via its own proprietary channels. It offers corporates the opportunity to use alternative payment technology sitting on its platformwhether fintech or from another financial services group according to what best suits them. The bank is like a conductor, keeping the orchestra in time, leading, listening, and interpreting the payments ecosystem on behalf of clients and their underlying consumers, explains Donovan. “We conduct the orchestra for the betterment of our corporate clients and their underlying consumers in any given marketplaces,” he says. Purpose Citi’s collaborationwith fintechs in last mile solutions also speaks to the bank’s other key priority in Latin America: helping to build financial inclusion. According to statistics fromFinnovista, the innovation and venture startup group, 36%of fintech startups in the region offer products to people excluded from the formal economy. Citi sees its aim beyond just offering commercial banking, says Donovan for whom this part of the job is most thrilling. The firm’s overarching purpose is to support financial inclusion and help grow Latin America’s formal economy spurring economic growth and employment creation, he says. “We want to be leading advocates of change and are able to promotemore awareness in support of the unbanked and under- represented populations across the region. We are vocal advocates for these constituencies with bank associations and regulatory authorities,” he says. It leads him to reflect how a central tenet to the pace and scope of Latin America’s payments revolution has been a conducive regulatory environment. “In the past, regulators could be somewhat hesitant, but this has now come full circle and there is an insatiable appetite to modernize financial services and adopt change,” he says. Most recently this is manifest in innovation around Central Bank digital currencies