Citi Perspectives 2024 E-commerce Edition

6 | Services Citi Perspectives Getting payments and liquidity right are critical to business success. But e-commerce is about much more. To achieve its strategic objectives, e-commerce firms need real-time global connectivity and data access. Risk management that aligns with firms’ operational model is also essential. In a 24/7 market, always-on controls and procedures that systematically identify, assess and address fraud and data breaches, while ensuring compliance and fostering confidence, are key. Establishing strong structures early on is key The focus on riskmanagement and governance often goes unheralded, especially in the run-up to an exciting event in a company’s journey such as an IPO. Many companies understandably prioritize revenue-generating areas like sales and product innovation. But that risks neglecting the need to build robust functions, that are central to governance, transparency, and compliance—key elements for meeting regulatory requirements and gaining investor trust. Establishing a strong structure early on helps fast-growing e-commerce companies to secure a solid foundation for revenue growth, business expansion, and long-termshareholder value. As well as managing day-to-day activities, e-commerce teams must also look ahead to anticipate future operational needs and the implications of technological innovation. One potential disruptive force that seems to have been perennially on the horizon is tokenization. The reality is that many businesses are still uncertain about what tokenization is, let alone using it. Improvements and developments are needed before tokenization can replace the current regulated financial system. Exploring the potential of tokenization However, tokenization offers a great opportunity for more efficient, secure, real-time global financial transactions. It ensures simultaneous and indisputable settlements, simplifies reconciliation, enables programmability for greater innovation, and reduces the need for financial intermediaries. Citi believes in the technology and has already piloted projects for Cash and Trade that could be gamechangers for clients. As our article explores, however, achieving industry-wide consensus is necessary for widespread adoption. This is where developments such as the Regulated Liability Network (RLN) — a collaborative effort among stakeholders to explore a new blockchain-driven financial market infrastructure — come in. E-commerce companies rely on a wide ecosystem, including telecommunications, which is essential for communication, shopping, entertainment, and business. Valued at around $1.81 trillion in 2021, the telecommunications sector is expected to exceed $2.65 trillion by 2030. 1 To achieve its strategic objectives, e-commerce firms need real-time global connectivity and data access. 1 W hy treasury is key to unlocking new opportunities for telcos (citigroup.com) https://www.precedenceresearch.com/telecom-services-market