Navigating the digital wave – Citi exclusive interview

Could you please share some details regarding your professional journey and your role at Citi?

Most of my professional career has been at Citi. I’ve been in the transaction banking space for over 15 years in various roles across Operations, Product Strategy, Business Development and Sales, mostly enabling cash management and payment solutions for corporate and public sector clients across the Europe-Middle East-Africa region. Last year within the transaction banking business, we launched Spring by Citi, a new vertical that delivers e-commerce payments innovation to our institutional clients, and my role is to lead the commercialisation and growth of this new business line in the EMEA region.

I’m a big fan of payments, this being a space that is undergoing significant innovation, transformation, and a lot of change.

Due to COVID-19, many companies are accelerating their shift toward digital-first models and digital ecommerce. How are corporates currently addressing strategic business priorities? What are their goals and what`s on their digitalisation agenda? 

The pandemic has been challenging for many companies but it has also created opportunities and new pivots. At the beginning of the pandemic, many corporates focused on business continuity and a significant shift in interacting with employees, customers, and partners through digital means.

Customer expectation shifted as a result of the pandemic, many going online for the first time – about 150 million consumers shopped online for the first time in 2020. The shift to digital from a consumer perspective is what’s driving corporate priorities to meet customer needs. 

As initial lockdowns eased, many corporates started to pivot from crisis management to growth, intensified by going digital. 

Companies that historically sold products through distribution partners are evolving their business model and going direct-to-consumer. Capitalising on the shift in consumer behaviour to digital commerce, they’re setting up ecommerce platforms to sell online and engage directly with end-consumers, gaining access to richer data which can help them drive better marketing and sales decisions. Also, they can improve margins and target a bigger share of the consumer basket. 

At first, the focus was on food and essential items, but many other sectors have also embraced e-commerce. Consumer goods sectors, retail brands, and even asset-heavy sectors, such as auto manufacturers, are setting up online platforms to sell parts, cars and accessories online, for example. 

Secondly, corporates are establishing B2B ecommerce platforms to enable their SME clients a digital experience for purchase and payments. This is enabling them to grow sales by offering a seamless experience to SME customers, not only in terms of what they purchase but also enabling access to digital payment methods through these platforms – card payments and alternative payment methods. 

The third pivot we’re seeing is corporates embracing digital payments to diversify how they make payments to partners further down the value chain, such as payments to freelancers, influencers, content creators and gig economy service providers. Our clients started adopting alternative payment methods to enable them to pay partners not only into  bank accounts but also into e-wallets. We also saw a preference towards the ability to pay out on demand, as companies sought to provide a better and more competitive user experience to their partners. Clients are leveraging our APIs and direct access to instant payment schemes around the world to facilitate these on-demand payouts. 

How can banks help corporates navigate digital commerce? And what is Spring by Citi`s mission and objectives of corporate treasury, payments, and the business?

As companies build out direct to consumer ecommerce capabilities, many that previously operated through distributors are now having to take on new components of the payments value chain. We see an elevated need for services to help guide our clients towards designing a strong payments strategy for driving conversion and ecommerce growth.

Cross-border ecommerce grew significantly across the world during the pandemic. How corporates manage cross-border ecommerce and the FX components related to that – selling and receiving in multiple currencies – is an area where banks can help, and at Citi we are supporting our clients with innovative solutions to enable them sell online in multiple currencies whilst mitigating FX risk. 

The third aspect is around addressing consumer payment preferences, an example being growing consumer preference for POS financing solutions, such as Buy Now Pay Later and lending capabilities. In addition to fintech lending options, banks must be ready to deploy balance sheets directly into e-commerce platforms to support lending at the POS to consumers. 

Finally, at Citi we work closely with our clients treasury organisations. Historically treasury didn’t play an active role in the e-commerce strategy of organisations, however we’ve seen that the pandemic significantly changed that. We help treasuries understand how they can collaborate internally and bring strategic value to the ecommerce initiatives within their companies, in terms of not only risk management but also enabling growth. 

Spring by Citi is our way of delivering these four aspects and creating value for our ecommerce clients through payment innovation. In a nutshell, Spring by Citi enables corporate merchants and public sector entities to accept online payments seamlessly and have the funds settled directly into their Citi accounts. It’s a comprehensive solution that includes payment gateway technology, access to local payment methods, domestic acquiring for our clients, embedded and transparent FX, settlement, and reconciliation services – all delivered under a Citi contract. The solution gives our clients the best of both worlds in enabling ecommerce growth leveraging a strong counterparty like Citi.

Could you expand on your view of partnering with the fintech sector? Please provide some noteworthy examples of successful partnerships. 

Partnerships and collaboration between banks and fintechs are pivotal because they deliver significant value to all parties (banks, fintechs, customers, and the broader financial ecosystem). Citi is laser-focused on fintech collaboration through several lenses. 

Firstly, we invest in fintechs through our Citi Ventures team, investing in innovative startups and companies that can bring solutions to help our clients thrive in a world of change. We complement investments with partnerships, where we embed fintech’s services into our solutions to create significantly enhanced value propositions for our clients. A lot of the companies we invest in become our partners. 

One example is HighRadius, a fintech with experience in the account receivables space. We invested in them and then partnered to leverage their AI and ML technology for our receivables capability to deliver enhanced reconciliation services to our clients. This partnership allowed us to quickly go to market with innovative reconciliation solutions in the AR space. 

Another example is our partnership with PPRO, a well-known fintech in the payments space and leading provider of local payment capabilities across many markets around the globe. We invested in PPRO and are partnering with them for our Spring by Citi proposition, to seamlessly access local payment methods in multiple markets. 

Our fintech partnerships are valuable to our clients as well because they provide access to innovative solutions in a controlled way after they have been through Citi’s rigorous due diligence. This ability to leverage these solutions through a known counterparty like Citi gives them comfort. Its value accretive for our fintech partners because it gives them an enterprise distribution channel that delivers at scale and access to a broader range of clients. 

The third way we collaborate with fintechs is by engaging with them as clients. Connecting our global network and solutions with fintechs that fall within our target market and helping them leverage our network to grow and go global. A recent example is our partnership with Stripe, where we are supporting their treasury initiative and how they can deploy Banking-as-a-Service to their customers, using Citi’s capabilities.

Gone are the days of the ‘us or them’ approach. Over the years we realised that collaboration and partnerships deliver significant value to the entire ecosystem and that’s the approach we take at Citi.

About Lola Adebanji

Lola leads commercialisation and growth for Citi’s new digital payments business, Spring by Citi, in the EMEA region, working to advance seamless ecommerce experiences for consumers and merchants through payment innovation. Prior to this, Lola led the ecommerce strategy for Citi’s Treasury and Trade Solutions (TTS) business in EMEA, building out payment and cash management solutions for some of the largest digital companies and Fintechs to grow their businesses in the EMEA region, and supporting traditional corporates as they pivot to new ecommerce business models. She was a mentor on the Citi Accelerate mentorship programme for Fintechs and enterprise focused start-ups, and previously led regional business development and partnerships to launch mobile payment solutions for Citi’s institutional clients in EMEA. Lola is an experienced speaker on digital themes such as Open Banking, ecommerce trends, and payments landscape developments. She holds an MBA from Judge Business School, Cambridge University.

About Citi

Citi Treasury and Trade Solutions (TTS) enables our clients' success by providing an integrated suite of innovative and tailored cash management and trade finance services to multinational corporations, financial institutions and public sector organizations. Based on the foundation of the industry's largest proprietary network with banking licenses in 90+ countries and globally integrated technology platforms, TTS continues to lead the way in offering comprehensive range of digitally enabled treasury, trade and liquidity management solutions.