Tuesday, September 15, 2009

Citi looks to social networking and YouTube in new banking platform launch

In the aftermath of the current financial crisis it would be easy to write off any innovation coming from transaction banks as most of them for the last few months have been hoarding capital to appease regulators and hunkering down as banking "goes back to basics".

A number of consultant studies also suggest that innovation, at least in the payments space, is more likely to come from companies like Google, Microsoft and WalMart. However, some of the transaction banks exhibiting at Sibos this year are eager to stress that the banks should not be written off yet when it comes to innovation.

One of those banks is Citi, which launched its "next generation collaborative online banking platform", CitiDirect BE (Banking Evolution) at Sibos in Hong Kong today. With Francesco Vanni d'Archirafi, CEO of Citi Global Transaction Services (GTS) describing the bank as a $9 billion technology start-up, Citi has a strong track record of producing award-winning technologies such as its online banking plaftorm CitiDirect, which back in 1999 when it was launched set the benchmark for the many online banking platforms from other providers that followed.

In 2005 Citi also launched its TreasuryVision portal, which combined information with analytics to enable corporate treasurers to gain greater visibility over their cash, risk and global liquidity positions. Despite the well publicised financial difficulties Citi has had in the last 18 months, Gary Greenwald, chief innovation officer, Citi GTS, said that the bank spends more than $1 billion on technology annually and that this year's IT budget was marginally higher than last year's.

Recognising that some aspects of its CitiDirect platform had become commoditised as other transaction banks developed online banking platforms that benefited from subsequent developments in technology, CitiDirect BE is the next incarnation of where Citi believes treasury and payments functionality is headed.

Interestingly, while Citi has historically targeted its solutions at top-tier corporates and other banks, CitiDirect BE will be initially rolled out to the SME market in Poland.It will also be sold as a white-labelled solution to other banks.

CitiDirect BE builds on lessons learned from developing TreasuryVision and embraces the latest in social networking, collaborative and Web 2.0 technologies to provide treasurers of both large companies and SMEs with a more intuitive, customisable interface for doing a whole bunch of things, above and beyond initiating payments, trade finance and FX transactions. CitiDirect BE is built on Microsoft .Net and Microsoft Office SharePoint Server 2007 Enterprise Edition. "SharePoint is a portal which allows us to deliver a new web services architecture," Greenwald explains. "Within the portal, we have a modular platform that allows different back-end technologies to come together at the front end."

Recognising that banks have been sitting on a lot of transaction-related information that they were unable to harness before in a meaninful way and push out to customers, Greenwald said CitiDirect BE builds on the analytics and information contained within its TreasuryVision platform to provide treasurers with data that can help them achieve greater insight into their accounts receivable and collections, as well as data that supports activities such as supply chain financing.

Pushing more data out to treasurers, says Greenwald, is not so much about having a "pretty dashboard" but about normalising and cleansing data from multiple back-ends to provide treasurers with quality and timely data. "We have taken the analytical processing and slice and dice capabilities within TreasuryVision and combined it with different sets of data around payment transactions and account openings," Greenwald explains. "So, for example, if you are running a large shared service centre you can look at the efficiency of your payment processes over time."

CitiDirect BE also incorporates the work Citi has done with major multinationals around Electronic Bank Account Management, combining digital signature technology with the ability to automate the currently manually-intensive process many corporate treasurers with multiple banking relationships face when it comes to changing account signatories and bank mandate management.

But perhaps one of the more unusual features of CitiDirect BE is the degree to which it embraces social networking and collaborative online technologies including a media channel, which Greenwald compares to YouTube, as it allows Citi execs in any country to develop a video library harnessing their expertise. Treasurers can search the video library and pre-register topics of interest. "If you look at social networking sites such as Twitter it took us some time work out how that makes sense in a B2B world," said Greenwald. To take a look at how CitiDirect BE's media channel and other functionlaith within the next generation banking platform works, click here.

Commenting on the launch of CitiDirect BE Jerry Norton, director of strategy, global financial services, Logica, said it was an exciting development, however it masks the complexities that still exist on the back-end in terms of the different interbank market infrastructures for processing cheques, card payments, high value and low value payments.

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