Citi: Innovating Trade Finance Requires Instant Payments, Digital Platforms

Tech is changing treasury — and, by extension, global payments.

“Fundamentally the bar has been raised across the board,” Shahmir Khaliq, global head of treasury and trade solutions at Citi, told PYMNTS’ Karen Webster.

The massive shift of consumer payments to online conduits — where frictionless, seamless B2C transactions are hallmarks — has set expectations that interactions between buyers and suppliers should be as fluid and intuitive, he said.

At a high level, said Khaliq, “the need for both real-time collections and payments are both major opportunities that are effectively mimicking the entire eCommerce agenda that we already see. And it’s an agenda that has effectively been supercharged during the pandemic.”

As a result, finance and treasury teams are reimagining their own payments workflows and processes — a timely, not to mention necessary, shift.

Supply chain disruptions and long delivery cycles are continuing to disrupt cash flow, leaving finance teams struggling to unlock liquidity. Those challenges, said Khaliq, “are a center of the page headline issue, a page one issue.”

Robust data flows can relieve some of the pressure, he contended. Speaking generally, banks seeking to serve their enterprise clients’ payments needs must ensure that their platforms are “always-on” and “volume-agnostic.” Fully digital ecosystems can provide end-to-end visibility through the entire payments workflow.

“Improving the visibility of cash is a key focus for treasurers and CFOs alike,” he said, and treasury workstations, ERPs and other digital tools that banks like Citi offer can help executives run their businesses more effectively.

“We at Citi have been investing and putting our data in a singular ‘data lake’ that allows us to give that data in a seamless a manner as possible back to our clients,” he said.

Consumerization — and Speedier Payments 

Data, again, plays a critical role. Khaliq pointed to analogs in the emergence of the “just in time” economy, government stimulus, and micro-suppliers in the gig economy, all of which have placed new emphasis on getting capital into the hands of those who need it without delay.

PYMNTS coverage has discussed this consumerization of commercial payments widely discussed in PYMNTS coverage in recent months, and Khaliq weighed in on the technical challenges that making more intuitive offerings for enterprises, while simultaneously grappling with the sheer volume of payments moving through Citi’s pipeline, involve.

Platforms, he said, “have to be able to carry those millions of payments across the pipe, and resiliency is a subject that regulators have a deep interest in.”

In response, he said, Citi has been building out its instant payment capabilities, where volume has more than tripled over the last two years. Much of that demand has been driven by the gig-economy workers who want fast end-to-end collection methods to allow them to continue to run their own commerce models.

But Khaliq noted that the direct-to-consumer (D2C) model has been gaining ground within several verticals (healthcare and consumer goods, for instance) – particularly where firms are adapting an eCommerce model.

“All of these things help to allow supply chains to get unclogged and see the normal resumption of business,” said Khaliq.

Going Global

Pointing to the near-term roadmap, Citi has been rolling out instant payments to more than two dozen markets, with a goal to be live in more than 30 markets globally. Key growth markets include China and India, Khaliq said. And the field is expanding for traditional and non-traditional players to help improve cross-border payment flows, as well as transparency and transaction costs.

“You will continue to see acquisitions, consolidation and partnerships in the cross-border space,” he predicted.

Looking Ahead 

Looking ahead at what’s to come in commercial transactions involves learning from the recent past. Khaliq said Citi navigated the pandemic with agility, improving client onboarding and experiences along the way.

But all in all, he said, the banking sector has proven to be “remarkably resilient” during the pandemic.

“We were able to continue to function, and payments moved around the world — and that was phenomenal.”

“There will be more work for us to do,” he said, “to see how we can help our clients get access to the data that we have — and run their businesses in an even more efficient manner going forward.”