Citi's cash boss talks

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In a wide-ranging interview Paul Galant, head of global cash management at Citigroup talked about trends in the industry, alongside regional colleagues Anthony Nappi (head of global transaction services in Asia-Pacific) and Sridhar Kanthadai (head of liquidity and receivables).

What trends are you seeing in the global cash management space and how do these apply to Asia?

Paul Galant: The global trends are perhaps more pronounced in the past 18 months than this industry has ever had. This is due to a very strong regulatory environment and a rising of yields globally. The trends are that global clients and multinationals are looking for control, transparency and actionable advice. It’s one thing to be able to provide that at a branch, but it’s quite another to provide it for a multi-banking system in all global regions. This is where we are focusing our energy, through a combination of the good fortune that we have of being in many countries, but also in being able to provide the technology that pulls all the data together and makes it useable for those treasurers.

What advances has Citigroup had on the technology front in the US and Europe and how does it compare to Asia?

Galant: On the technology side we decided to build global platforms that are modified very slightly, as opposed to being created within a specific country. The best example we have of that is a new global platform we’ve rolled out called TreasuryVision. In our view, its impact on the industry is that it is probably going to do what CitiDirect, our internet banking platform did for Citigroup a couple of years ago.

We are putting a lot of our energy behind it and TreasuryVision essentially meets the trends in the marketplace. It connects our clients not only to their internal systems, but it also connects to their enterprise resource planning (ERP) systems. It connects to the way clients forecast their cash, whether by spreadsheet, fax or workstations, if they have Wall Street systems. Additionally, it connects to every single financial supplier that these clients use - it doesn’t have to be Citigroup.

Through this connectivity, TreasuryVision takes the data and puts it into a knowledge warehouse, which is staffed by world-class operations staff who are experts in dealing with financial data. Those folks then put the seal of approval on the data. It’s really a hybrid between a technology and a service. Once the data is deemed good, it then moves into a transparency model, which gives our clients – treasurers - more control and transparency than they have ever had before.

I remember sitting down with a treasurer who first saw the implemented version, and he said, “I can’t believe how much cash I have sitting here and how much I have been borrowing over there.”

TreasuryVision creates a more effective way of managing liquidity, which is something that the regulators have been after for years. Once the transparency is there, we then move into the analytics and what we’ve found is that clients don’t have to keep as large a cash cushion anymore because they have transparency and less risk. Then the question for our clients is: “What do you do with the money? Do you put it back into your purchasing department to get the advance of early pay discounts? Do you buy back commercial paper or do you invest in the nine funds that governance allows you to invest in?”
It’s a very comprehensive end-to-end platform that ties all these trends together and some of the largest companies in the world who are early adopters are taking to it very well.

Anthony Nappi: The key issues in the way our business model works is that we try to always look at this business on three plains. Firstly, on a global basis as a large part of our customer base buys us globally. Secondly, regionally, and lastly, by country. The beauty about the TreasuryVision platform is that it is available in every region of the world now. Within Asia, we have two customers up and running. There are a number of other customers in the implementation queue. The platform is uniquely built for the three things that treasurers think about most: control, transparency and optimisation of the liquidity they have either in the region or globally.

There are a couple of other of technology advances that we’re seeing: one of the things we’ve looked at in the delivery space is being able to provide a treasurer the ability to start booking deposits and investment online. Two months ago, we rolled out an online platform in Asia leveraging CitiDirect. Our online investment option allows treasurers to book deposits online and it will cater for numerous investment vehicles all customised by company. We’re starting in Australia and New Zealand and by the end of the year we’ll have about 10 more countries coming on board.

From a treasurers’ point of view, information is important and control over the information is also important in terms of where to invest. We made significant investments in CitiDirect in addition to the TreasuryVision roll out. Today, in the region, we have 7,800 customers using CitiDirect which represents a 20% growth year-on-year. Both the transaction volumes and the transaction values have increased in the neighbourhood of 50%. We’re processing approximately $1.5 trillion of transactions on an annual basis and we’ll continue to enhance and increase the functionality.

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