Case study: Citi – terms of endearment
A series of initiatives support Citi’s business clients in the quest to do business in real time. Alison Ebbage speaks to Citi treasury and trade solutions’ Ireti Samuel-Ogbu, EMEA head payments and receivables, and Magdalena Mielcarz, EMEA head of channel and enterprise services.
For Citi’s corporate clients, the move to a streamlined digital world has also brought about process automation and a move to real time and visibility within processing. The demand for this, and the technological capability to do so, has happily dovetailed with the move to Open Banking, which enables greater connectivity through API data flows.
Samuel-Ogbu comments: “In terms of changes of context, we are seeing a general shift from batch to real time as evidenced by APIs, real-time payments and the like. In turn, this is enabling customers to benefit from real time capabilities across the service spectrum, from real-time visibility to real-time payments and funding management.”
She explains that real-time payments systems, when combined with API technology, can enable secure data exchange in real time between the banks and its clients. Additionally, with the emergence of Swift global payment innovation (gpi), customers also receive real-time tracking of cross-border transactions.
Another key lever, she adds, is the Open Banking framework across Europe (with PSD2 and UK Open Banking) that will deliver new value add for corporates, both in terms of new payment solutions and enhanced multi-banking services via open APIs.
The potential opportunities afforded by Open Banking have received a lot of attention. Citi is one of the first banks to join the UK’s Open Banking directory as a payment initiation service provider (PISP) and now intends to leverage Open Banking to provide an aggregated collections service for its business clients, tapping the standardised open APIs of the country’s largest nine banks.
Samuel-Ogbu comments: “Open Banking is part of a wider shift in the global banking landscape to a real-time, hyper connected environment. We see Open Banking as a significant development in Europe and increasingly in other regions as regulators seek to drive competition and innovation in financial services. Open Banking in the UK is particularly attractive to us and to our clients, as it can enable collections with open APIs standardised and live across the Competition and Markets Authority nine (CMA9) banks.”
She adds: “Citi’s vision is to enable global connectivity for our clients to avail themselves of Open Banking services – for real-time payments and collections – thereby insulating our clients from the complexity of bilateral connections to large number of bank APIs.”
Such simplicity is “particularly attractive” to clients, she notes.
To enable this, Citi has expanded its API solution through CitiConnect, which takes in real-time information on FX rates, account statements, direct debits, cut-off times, faster payments, and proof of payment.
Mielcarz comments: “CitiConnect is all about automation and integration. It moves the transaction origination from the bank site to the client’s own system or application. So our clients’ platforms (i.e. ERP or TMS systems, payment apps, etc) connect directly to Citi product processors, with no manual operations in between, meaning there is no need to input transactions individually. This helps in achieving a greater level of operational efficiency and speed.”
The platform started life with traditional batch-focused Electronic Data Interchange (EDI), subsequently onboarding SwiftNet FileAct connectivity solutions. Next came the standardisation of file-based interfaces around ISO 20022 XML. The latest step has been to employ API technology to bring client-bank integration to the next level.
“The type of clients using CitiConnect API has changed, with digital natives becoming the fastest adopters. Our clients like the instant payment capabilities, and the straight-through processing nature of the service that unlocks greater efficiency and speed,” Mielcarz observes.
“Traditional treasuries, meanwhile, continue to rely on batch processing via CitiConnect for transaction initiation and adopt CitiConnect API mainly for various information inquires and statements.”
The CitiConnect platform now accounts for almost 60% of all transactions initiated by clients and over 30 million API calls have been processed this year to date.
The best attribute of the platform is its real-time capability, she says. “API technology is, by its nature, best suited for on-demand services with real-time responses. This is how we see the future of banking connectivity – agile, dynamic and secure – yet open for industry players to build superior services for end-users.
“Emergence of real-time payment schemes around the world is a catalyst for faster adoption of APIs. The old-fashioned file-based EDI approach does not do justice to the modern real-time payments.”
The platform is also linked to a sandbox – the CitiConnect API Developer Portal. This is an online repository where customers access the latest documentation on Citi’s APIs in a sandbox environment where they can perform technology testing and validation. It can accelerate technical development and improve the quality of technology integration. The other benefit to the sandbox environment is that it can be used as a means to onboard.
Mielcarz explains: “Our sandbox, together with a broader developers’ portal is a modern way of delivering technical specifications to developers, with the ability not only to learn how various API services work, but to try them as well. “There is nothing that developers cherish more than the ability to instantly verify and debug a new piece of code…”
This is an excerpt. The full article is available in the November 2018 issue of the Banking Technology magazine.
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