Trade Digitization Client Advisory Board Treasury and Trade Solutions
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
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
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?
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 Q4 2016 for Imports with all products to follow 2017/2018. Imports Dec 2016 Nov 2017 2018 Guarantees / Standby LCs Exports CitiDirect Classic CitiDirect BE 1 2 1 3 4 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.
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
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