the-nerve-centre-of-citis-asiapacific-cash-management-business

The nerve centre of CitiÆs Asia-Pacific cash management business

We visit CitiÆs regional cash processing management unit in Singapore.

In a non-descript business park sandwiched between Singapore's Changi International Airport and a subway depot stands a modern low-rise office building. Built in that mercilessly repeated new international style of glass and steel, passersby would never guess that inside sits a nerve centre of Citi's Asia-Pacific cash business.

Hidden behind the mirror-like facade is the bank's Regional Cash Processing Management Unit (RCPMU). Processing the bulk of Citi's cross-border fund transfers in Asia-Pacific, some 40,000 transactions worth an estimated $65 billion pass through the unit every day.

"The growth has been tremendous," said Deepak Singh, director and Asia-Pacific head of regional cash management processing at Citi. "Between two and three years ago, the total amount we processed was over $40 billion. The volumes and value of the transactions we process have increased significantly."

Indeed, Citi's entire Asia-Pacific cash business has grown significantly over this period. Net income for transaction services, the division including cash management, totalled $1.15 billion in 2008, up 88% since 2006.

First opened in 1992, the Singapore RCPMU is one of the bank's four treasury operations centres in Asia-Pacific. Together with centres in Kuala Lumpur, Penang and Shanghai, the various units process the full spectrum of transaction banking activities, including trade and securities services. Citi choose Singapore for its main cash operations centre because of the city-state's political stability and high level of secure connectivity with the rest of the world.

The bank is hardly alone in operating centralised transaction banking process centres. Deutsche Bank has a similar operation in India, J.P. Morgan has one in Hong Kong and Standard Chartered has one in Malaysia.

The Singapore unit is an impressive operation. Walking through it, snippets of the centre's myriad of operating languages -- Chinese, both Cantonese and Mandarin, English, Japanese, Malay and Thai -- waft through the air. Covering two floors of the eight-story building, the unit processes payments from 16 Asia-Pacific countries as well as from parts of Europe and the US. With its 24-hour, six-days-a-week schedule, the floors are almost always buzzing.

Indeed, the unit's peak operating times are from 4am (when New Zealand opens) to 12 midnight (when Europe closes).

At 4pm a red light flashes above the open-plan office space and a recorded message plays on the public address system warning employees that the cut-off for Singapore dollar payments is half an hour away. The red light is only one of an array of coloured lights the RCPMU has installed as part of its visual alert lighting system to warn staff of the various currency cut-off times throughout the day.

"In the early days, cut-off times had to be tracked manually," said Singh. "Now we have implemented audio-visual alerts so we don't miss [them]. With fund transfers we can't afford to miss the cut-off time," he concluded.

The audio-visual warnings are just one of the RCPMU's innovations. To facilitate manual transaction processing, the unit collaborated with Adobe to create a submission form template that allows a customer to simply input its details offline, then email or fax the form to Citi. The beauty of this is when a customer saves the form, the software automatically generates a data-rich barcode with all the transaction details -- the RCPMU then only needs to scan the barcode and the information auto-populates in its system.

This manual innovation is critical to improving the RCPMU's productivity. Currently, about 60% of its 180 staff are dedicated to manual transactions, another 35% to "repair" -- when an inconsistency occurs in an electronic process -- and the remaining 5% to monitoring automated transactions.

"Today 90% of our transactions are submitted electronically, of which 75% are processed straight-through, in other words, without the need for any manual repairs," said Singh. "Approximately half of our staff are involved in processing transactions submitted manually, which comprise 10% of overall volume."

The unit has succeeded in improving overall productivity, achieving 5,596 transfers per employee in 2008 compared to 2,781 a decade ago. Over the same period, average monthly volume has increased three-fold. 

"Centralising obviously gives us economies of scale and standardisation and simplifies the process," said Umang Moondra, managing director and Asia-Pacific operations head for global transaction services in Singapore. "But the most important thing it does, when processing transactions from different places, is reduce inconsistencies in the process and strengthen and improve our risk and control framework."

Citi plans to continue to grow the RCPMU. On July 20, the unit, along with the majority of Citi's Singapore operations, moved to its new environmentally-friendly building near the airport. RCPMU's two floors are spacious and employee-friendly -- plants fill the pantry on each floor or "the village green" as Moondra put it -- and there is obvious extra space among the desks.

Moondra outlined the unit's priorities this year and next: "Improving our operating leverage by continuously looking at ways and means to reduce costs and increase productivity. Linked to this initiative is automation and continual process improvement. Finally, we are expanding the product suite and product capabilities that we have here, such that we provide our customers with the best products and services in the most efficient manner".

Indeed, the unit will be at the centre of all of Citi's cash management product development and operational improvements in the near future, acting as the "heart" of the business.

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