Trade Digitization. Client Advisory Board Treasury and Trade Solutions

Transcription

1 Trade Digitization Client Advisory Board Treasury and Trade Solutions

2 Blockchain: What is it? Append only distributed system of record shared across business network Immutability means transactions can t be modified in isolation supported by distributed nature of the ledger Shared Ledger Cryptography Ensuring secure authenticated and verifiable transactions Only seen by those who should see it All parties agree to network verified transaction One version of the truth Consensus Smart Contract Business logic embedded in transaction database and executed with transactions Block records each timestamp for the transaction and order the blocks are to be sequenced Block chains are formed as each block is affixed to the previous block Source: IBM

3 Blockchain: Is it Applicable for Trade? Recent Trade Blockchain Pilots Tested transfer of trade documents between importer and exporter Open account payment of $35,000 LC like digital smart contract Invoice verification Promising developments and limited proof of concepts but more time and effort is needed before Blockchain can be applied at the scale required for Trade Source: SWIFT position paper on Distributed Ledger Technologies, Accenture Blockchain Technology: Preparing for Change, Citi Analysis

4 Blockchain: Proposed Approach For Industry Collaboration Market Challenge Proposed Approach Providing sufficient cost effective financing to SME Suppliers while mitigating fraud risk. Additionally, the trend of extended payment terms has put additional pressure on Suppliers Buyers, typically investment grade companies, are concerned about the financial viability of their supply chain but are also focused on their own working capital metrics and overall cost of goods sold Banks want to be able to provide more financing solutions but need more transparency to reduce fraud, which is a high risk for invoice financing or factoring solutions Multi-bank offering for scale, network effect to prevent fraud and allows Suppliers options for bank financing Industry technology solution to verify purchase orders, invoices and other key data via Blockchain technology Solution would prevent common invoice fraud such as duplicate invoice financing, and where possible, verify information against Customs and BL details Transparency of supplier historical performance Common platform to onboard Suppliers and Buyers Support existing H2H connectivity and integrate with existing bank systems Would this concept make sense for your business and Supplier base?

5 TTS Trade Continues to Invest in CitiDirect BE Trade Services CitiDirect BE Trade Services improves the client experience for managing transactions throughout their extended lifecycle. The new Java-free screens are planned for delivery and pilot in Q for Imports with all products to follow 2017/2018. Imports Dec 2016 Nov Guarantees / Standby LCs Exports CitiDirect Classic CitiDirect BE Client Feedback The new widget is more user-friendly. Nice to have all important information including notifications in one place. Can we have it by tomorrow? The user interface looks cleaner and simpler. New platform functionalities make it easier, practical, and more user-friendly.

6 Citi Leads the Industry in Making Substantial Investments in Key Innovative Digital Technology For Trade Deploying OCR technology Historical manual paper intensive processes Document Classification A B C Noun Search Data Extraction Considering how we can utilize advanced analytics to identify red flags, unknown behavior, complex patterns and relationships Advanced Analytics automate the current manual red flag review and add additional capabilities to cover unknown behavior, complex patterns, and relationships Red Flags Business Rules Rules and crosschecks for known high-risk scenarios Unknown Behavior Anomaly Detection Abnormal values for entities (e.g. party, goods) including peer group comparisons Complex Patterns Text and Predictive Analytics Predicting patterns learned from prior behavior Relationships Entity Linking Entity resolution and discovery through link analysis Automation of processing steps factors are scored and evidence is systematically stored to support the analytic outcomes Party Goods Pricing AML/BSA Transaction Other s Automatically classify documents by type, identify proper nouns for compliance screening and extract key data elements required for processing Decisions are based on the combination of the analytic findings and Citi risk and business policy Transaction Score + Policy = Automated Decisions

7 IRS Circular 230 Disclosure: Citigroup Inc. and its affiliates do not provide tax or legal advise. Any discussion of tax matters in these materials (i) is not intended or written to be used, and cannot be used or relied upon, by you for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the promotion or marketing of any transaction contemplated hereby ( Transaction ). Accordingly, you should seek advice based on your particular circumstances from an independent tax advisor. Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements. This presentation is not a commitment or firm offer and does not obligate us to enter into such a commitment, nor are we acting as a fiduciary to you. By accepting this presentation, subject to applicable law or regulation, you agree to keep confidential the information contained herein and the existence of and proposed terms for any Transaction. We are required to obtain, verify and record certain information that identifies each entity that enters into a formal business relationship with us. We will ask for your complete name, street address, and taxpayer ID number. We may also request corporate formation documents, or other forms of identification, to verify information provided Citibank, N.A. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.