The financial sector has been one of the most early and active adopters of digitization. In recent years, we have seen a major shift from paper-based financial transactions to digital ones. This trend has been driven by a number of factors, including the increasing prevalence of mobile devices and the need for faster, more efficient financial services. As a result of this shift, we are seeing an increase in the use of mobile banking, online payments, and other digital financial services. The benefits of digitization are clear: it enables faster, more convenient financial transactions, while also reducing costs and increasing efficiency. However, there are also some risks associated with this trend, including the potential for cyberattacks and financial fraud. Nevertheless, the advantages of digitization seem to outweigh the disadvantages, and we can expect to see further adoption of digital financial technologies in the years to come.
Trends towards digitization, based on both customer desire and the challenges of a global pandemic, have forced players within the financial sector to address the challenges required to keep pace. Sara Khairi explores how Citibank is addressing the challenges in Tearsheet:
“Citibank is diversifying digital solutions to enable growth, speed-to-market, and deliver a better user experience. To keep up with the new wave of digitization, Citi provides online and mobile banking solutions to its clients via the web-based banking platform CitiDirect. For file exchange, messaging processes, and API solutions for cash management, the bank has developed the CitiConnect online channel service. The bank also facilitates digital wallet transactions for users across the globe.”
In her discussion with Steve Elms, Citibank’s Global Head of Sales for Citi Treasury and Trade Solutions for Corporate, Commercial and Public sectors, he discusses how Citi is changing their mindset towards digitization to modernize systems:
“The landscape we find ourselves in is complex: companies are going global at record speed; many of our clients are born global these days. Digitization is creating the need for massive scale and greater agility. Businesses and geopolitics are so intertwined that they’re creating an entirely new paradigm for multinationals. From Citi’s perspective, we have embarked upon a transformation to become the preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in our home market.”
Elms specifically speaks of the benefits attained through tokenization in mobile wallets as a lead that will pave the way for additional enhancements with increasing use of blockchain:
“With tokenization, whether managed mobile wallets or payment intermediaries — with the likes of PayPal, Apple and Google, Alipay and WeChat Pay — we are moving towards technologies that are always on and allow for commerce and payments to be transacted in a 24×7 environment. Furthermore, many are now starting to evolve further through the provision of offering through blockchain/DLT technologies, which not only allow for immutability but can also provide programmable solutions such as directly linking the transfer of assets to the transfer of payments. This is helpful to solve some of the inherent challenges that are common today – of separate delivery v/s payments processes.”
Citi’s response to the evolving environment highlights the need for FI’s to evolve internally and seek expertise and partnership from tech disruptors both inside and outside of banking to provide optimal service for customers moving forward.
Overview by Jordan Hirschfield, Director, Prepaid Advisory Service at Mercator Advisory Group