Fintechs may be in the spotlight when it comes to innovation, but Citi’s Treasury and Trade Solutions boss believes the bank can give them a run for their money, finds Joe McGrath.
Advances in technology and service for consumers are raising expectations on the corporate level, driving change in the business environment. Ireti Samuel-Ogbu, Citi’s EMEA payments and receivables head, Treasury and Trade Solutions, sees ‘co-creativity’ and the fast-paced environment in which the change is taking place as important challenges.
She explains: “The financial crisis happened in 2008. Soon after that, was one of the biggest shifts we have had. It was the explosion of the Internet. It moved from just being about information to being a social network.”
Samuel-Ogbu says this change turned the internet from purely an information source to something that facilitated transactions. “Marketplaces and ecosystems were born, with a new focus on clients and client experience.”
The Citi Treasury boss says technology giants such as Amazon have hugely influenced the level of expectations people have when it comes to customer service. This has spilt over into the corporate world.
“What you find over time is transference of what we experience individually, to what we will accept in a professional capacity,” she says. “If you experience a great client experience with Uber, for instance, you are going to be less tolerant of old fashioned experiences from banks.
“These secular changes, technological shifts, growth of marketplaces and ecosystems, have all facilitated a new way of thinking.”
The payments industry is fast becoming one of the most dynamic sectors in financial services, propelled by advances in technology and innovations from both large banking institutions and the smaller fintech players.
Samuel-Ogbu says that one of the paradoxes with innovation and digitisation is that much of it has been driven by regulators. “Whether it is the real-time payments happening all over the world, payment gateways in the Middle East, or financial market infrastructures combining with mobile wallets in Africa and Pakistan,” she says.
“For me, one of the biggest challenges is this is happening at pace. To my mind, the increasing pace of regulation and digitisation is one of the biggest changes and challenges.”
Another change related to this is client transition to a “world of 24/7”. “Previously, we had cut-off times, end-of-days, and 9-5 when things were being done. Now we are in a world where commerce is 24/7 and the expectation is to handle that accordingly.
“Treasuries may still be handling these in a timeline of 9-5 but because their clients are buying within a 24/7 timeframe, it means we, as a bank, adopt more of a ‘follow the sun’ [approach] to support our client transactions.”
While Open Banking and PSD2 are making the industry more accessible and improving services, the increased competition from fintech players is causing some concern to the big banks.
However, Samuel-Ogbu isn’t concerned, saying banks are responding to the increase in customer expectations. “Today, roughly 10 per cent of global commerce is happening digitally. As our clients move more direct to consumer, they are not working with the traditional aggregation points of the past.”
She adds: “They used to work with distributors and import from large providers to get their goods to the final consumer. Now they are going direct to consumer. They are looking for a bank to enable real-time collections.”
A big proportion of Citi’s clients are large-scale multinationals. These organisations have the highest expectations in terms of delivery timescales and innovation. “They want to be able to collect in real time and with a consistent experience across the globe, with as few partners as possible, so they don’t have to use different legal systems and backdrops.”
This, according to Samuel-Ogbu, is where Citi is coming in, in helping to build a single global interface. “We are leveraging new technology, and APIs, to connect to all the instant collection capabilities and alternative payment methods like wallets to facilitate ecommerce for our clients,” she says.
There is no doubt that greater importance is being placed on technology. Banks have significantly increased their annual IT spend, while consumers are more widely adopting payment services such as ApplePay, Google and other digital wallet applications.
She sees PSD2 as a catalyst which encourages banks to act more like fintechs, essentially becoming payments initiation service providers.
“Like a fintech, it enables us to collect from bank accounts for our merchant clients through APIs. Banks can start leveraging some of this innovation.”
Ultimately, the driving force behind the direction of change and innovation is the client, says Samuel-Ogbu. “There is one clarion call we have at the moment, which encompasses our strategic direction: ‘being the best for our client’,” she says.
“Traditionally, you developed a product and presented it to the client. Now, more and more, it is about co-creation, thinking about design principles, clients’ user cases. What makes sense to the client? What is of value to the client? What will improve the client experience, excite them and make a difference? That is a very sharp departure from the past 30 years, which was very much a supermarket approach.”
At Citi, fintechs are considered collaborators rather than competition, Samuel-Ogbu explains. “Citi Ventures takes strategic shares in fintechs. We have collaborated with fintechs in areas such as payment risk management and reconciliation.
“There is a lot that has been documented in Open Banking on the information aspect. There hasn’t been as much about being at the forefront of enabling collection from bank accounts as an alternative to cards. Our aim is to build a payment network of the future, a network of networks.”