Treasury and Trade Solutions

Transcription

1 Treasury and Trade Solutions May 7, 2014 Treasury and Trade Solutions Naveed Sultan Global Head of Treasury and Trade Solutions

2 Partnership is not a posture but a process a continuous process that grows stronger each year as we devote ourselves to common goals. JFK 1

3 Citigroup Financials 1Q14 Update Citigroup 1Q14 Revenues ($bn) 1Q14 Results: Revenues of $20.1Bn Net Income of $3.9Bn Tangible Book value per share increased to $56.40 Progress in key execution priorities Loans and deposits growth, with expense discipline Institutional Clients Group 1Q14 Revenues ($bn) Citi Holdings losses reduced by over 60% YoY Citi Holdings assets of $114bn declined 23% QoQ Deferred tax assets reduced by approximately $1.1B in 1Q Building a safer and sounder institution Basel III Tier 1 Common Ratio of 10.4% Basel III Supplementary Leverage Ratio of 5.6% 2

4 Treasury and Trade Solutions (TTS) TTS underpins Citi s global business model and client relationships TTS strong portfolio of capabilities and solutions TTS approach is client centric and value driven. >3,000,000,000,00 0 $ value of payments processed daily Trade Payments Wholesale Cards 421,760,000,00 0 $ average deposits and other customer liabilities TTS Receivables Channel Services Liquidity Management Services Currencies handled by TTS global platforms and gateways Countries where we have a banking license TTS Key Attributes of Client Engagement: Client Experience Consultancy Solutions Innovation Technology Execution Network 3 as of Q4, 2013

5 TTS Strategic Relevance to Citi s Model We will continue to invest in our Treasury and Trade Solutions business, the backbone of our global network, while we capitalize on our focus on the payments side. This business is capital friendly and not easily replicable. It took us decades to build and remains the clear global industry leader. Michael Corbat, Citigroup CEO 2013 Annual Report - Letter to Shareholders 4

6 We are Living through Times of Unprecedented Change Change is the law of life. And those who look only to the past or the present are certain to miss the future. JFK 5

7 Secular Trends Shaping the Future Past (1990) Present Future Globalization 17 % 26 % 33 % EM Trade as % Global Trade Exports share of GDP Exports share of GDP Urbanization USA JPN DEU USA CHN JPN CHN USA IND Largest world economies Largest world economies Largest world economies 43% world population in cities 53% world population in cities 70% world population in cities (2050) 9% world population > 60 years old 11% world population > 60 years old 22% world population > 60 years old (2050) Digitization 0 1.5bn 6.5bn Mobile broadband subscriptions: None Mobile broadband subscriptions: 1.5bn Mobile broadband subscriptions: 6.5bn (2018) Regulation Internet users: Nominal Web browser introduced in 1992 Internet users: 2.7bn 39% global penetration Internet users: 3.6bn (2017) 50% global penetration Major New Regulation passed every years Office of Foreign Asset Control Bank Secrecy Act Money Laundering Control Act Increasingly complex banking rules passed at an escalating pace in the past 13 years, with indications that pace will continue Since 2000 FACTA, US Patriot Act, SEPA, USAPA Certificate Benchmarking Dodd-Frank Act, Durbin Amendment, Payment Services Directive II, Recovery &Resolution Planning, Basel III, Primary Sources: EIU, Roland Berger, United Nations Statistics, WHO Statistics, Forrester Research, Citi Analysis 6

8 TTS is a POSITIVE Play on Global Macro Trends Globalization Global Network to service the changing size and direction of flows Urbanization Focus on Urban Ecosystems Digitization Investments in Digitalization & Innovation 7

9 These Trends Are Shifting the QUANTUM & DIRECTION of Flows Cross-Border Investment Flows North America $65.0T UK $9.7T Western Europe $53.4T Russia, Eastern Europe $4.3T Emerging Asia $24.5T Japan $26.8T Arrow width shows value of crossborder investments between regions % 1-5% 5-10% 10%+ Middle East, Rest of World $7.9T Hong Kong, Singapore, Taiwan $4.5T Arrow color shows flow opportunity Traditional flows Growing opportunity flows Latin America $6.6T Australia, New Zealand, and Canada $4.0T Domestic financial assets New corridors of flows Rise of Emerging Markets Globally integrated marketplace We are facilitating new and emerging corridors 8 Source: International Monetary Fund, McKinsey Global Capital Markets 2011, and CTS analysis (1) Includes total value of cross-border investments in equity and debt securities, lending and deposits, and foreign direct investment

10 Digitization - TTS Strategy Our focus is to digitize our entire business and operating model. Macro-Trends Digital Strategy Strategic Priorities Macro Economy Changing direction of flows & markets uncertainties Expand channels and extend reach through digital technology Regulation Transparency requirements driven by regulations Competition Banks and non-traditional competitors are expanding into transaction banking Globalization Automation, centralization of information across ecosystems Enhance end-to-end client experience Deliver greater value to our clients Leverage our global scale to digitize financial flows Drive competitive differentiation Extend core digital platforms, products, and services Optimize business performance for Citi and clients through rich data and analytics Deliver Platforms and products that enable channel & device expansion, and reduced cycle times 9

11 Digital Transformation Drives Business Value (1) Treasury Vision Real-time management information system Optimize Receivables Vision / Payment Analytics Enhanced Corporate Control CitiManager Extend Treasury Diagnostics Business Performance Product and Service Innovation CitiConnect CitiDirect BE Trade CitiDirect BE Analytics Decision making Connectivity Supply Chain & Trade Services Expand Recurring Payments CitiDirect BE mobile, tablet Distribution and Channels Automation Innovation Customer Experience Deliver Services Tracking and Reporting Systems (STaRS) Embedding UX Design standards ebam Digital Account Management Risk Optimization Embedded / automated controls and risk profiling Electronic data security and paperless solutions Tackling fraud and overpayments in Public Sector Flows 1- Based on McKinsey & Company, Finding your Digital Sweet Spot, November

12 Holistic Approach Towards Digital & Innovation Expand channels and capture new flows Extend core digital platforms, products, and services Deliver consistent and enhanced client experience across the network Optimize business performance for Citi and clients through rich data and analytics CitiDirect BE SM Whether it s on mobile, tablet or the web, clients have a complete and consistent view of all of their cash management capabilities. CitiDirect BE Trade Trade clients can perform critical operational transactions: upload trade documentation, access Citi Supplier Finance, and more. ebam Digital application for managing account opening, signatory changes and maintenance, enabling self service in 54 countries. CitiDirect BE Analytics Access sophisticated payments and receivables solutions via interactive dashboards CitiDirect BE SM Mobile CitiConnect CitiDirect BE Self Service Global Flows Analytics Award-winning mobile banking platform for institutional clients to conduct business anytime, anywhere in real time. CitiConnect integrates payments, receivables and information with clients data systems from anywhere in the world. Best in class self service capabilities to gain the most current and relevant information about accounts, inquiries and cut off times. Mining Citi s global transaction flow data to yield actionable intelligence and enable clients to visualize their supply chains and optimization opportunities CitiConnect 11

13 Leading the Way to the Future Digital Money Index Index Score Global metrics to link digital money adoption with various measures of socio-economic development. Questions Asked Does digital money adoption make a difference? What factors affect the outcome of a digital money initiative? Can we quantify the benefit of adoption to governments, businesses and individuals? Four Key Pillars to the Readiness Index Does Readiness Stage of Readiness drive adoption? Does Readiness drive adoption? Correlation 0.79 Digital Money Readiness Index Cashless Intensity Consumer Spending via Digital Channels vs Total Consumer Spend Pillars were further disaggregated into 15 attribute indicators that helped to create a composite score of the preparedness of any country / economy Groupings based on characteristics exhibited by underlying pillars for stakeholders to recognize their nation s current level of digitization and provide perspective on how to progress. Most of the countries that are best prepared for digital money adoption tend to use less cash but cultural factors play an important role 12

14 TTS Approach to Innovation Recognized by HBR Citigroup developed models for transaction data to analyse the flow of money in different parts of the financial system, uncovering inefficiencies that hindered its clients ability to make effective use of different payment mechanisms. Over a five-year period those models have been honed into a stream of client services. 13

15 Digitization - Measuring Impact and Progress In order to successfully execute upon our digital strategy, three imperatives have been established to drive focused execution, allowing for further competitive differentiation. Commercialization Focused Digital Scorecard Client Experience Partnering to effectively scale TTS assets across our market footprint Ensuring digital innovation is translating into business results Creating a sustainable competitive advantage through next generation digital experiences 14

16 Client Experience is a Sustainable Differentiator Client centric approach to client experience Aligning functions to ensure clients are experiencing more seamless service, streamlined decision making & simplified processes Organization Target Client Model Refining differentiated service models Functions & Franchise Processes Client Advocacy Network Management Client Global Product Initiatives Operations & Services Performance Management Redesigning processes to reduce cycle time and client contact points Location & Site Strategy Technology Standards & Platforms Leveraging technology to re-engineer delivery mechanism, standardize document repositories and automate process workflows 15

17 Enhancing Client Experience-TTS Client Service Progress Tracking Focus Client Advocacy Content Management Network Management Product and Regulatory Communication Examples of Progress to date central knowledge management tool to provide timely and accurate information to clients is now live for Citi client facing functions in EMEA (TTS, GSG and Banking) Documentation Content & Process Streamlining Documentation Requirements and Digitizing Process* Streamlined account opening documentation in 47 countries, reducing and eliminating client paperwork 99.9% audit certification request delivered within 7 days SLA (WE + 5 African countries) 50% of local account opening documents eliminated in EMEA Global Product Ease of Doing Business through self service, automation and product enhancements Services Increased Transparency Payment Status Inquiries* Recurring Payments & MIFT Digitization* Account Balance widget* Service Tracking and Reporting Systems (STaRS)* Leveraging CitiDirect BE real time payment status Live in 62 countries Payment Analytics - in implementation in Asia Receivables Vision - Live with some US clients Completed rollout in 118 countries Service Responsiveness Technology Change Calendar live for over 50 clients Overall Client Contact rate improved from 0.27% of total transactions in 12 to 0.18% in 13 Client Service Team Coverage 3 add l languages supported in Dublin (Mandarin, Russian, Spanish) 16 *Available to Clients

18 It always seems impossible until it is done. Nelson Mandela 17

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