contextualizing payments data - banking with citi | citi.com€¦ · · 2015-10-14contextualizing...
TRANSCRIPT
![Page 1: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/1.jpg)
Contextualizing Payments Data Opportunities and Challenges
Nirva Dalgin
Global Product Manager, Clearing & FI Payments
![Page 2: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/2.jpg)
Agenda
• “Big Data” and its Applicability
• Insightful Uses of Data
• Payments Data Opportunity
• Where to Start?
• Comments
![Page 3: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/3.jpg)
"Big Data" and its Applicability
![Page 4: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/4.jpg)
Defining Big Data “High-volume, high-velocity and high-variety information assets that demand cost-effective,
innovative forms of information processing for enhanced insight and decision-making.”
- Gartner
![Page 5: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/5.jpg)
Applicability of Big Data to Wholesale Banking
Volume • Moderate – not on the scale of classic Big Data use cases but growing
Velocity
• Moderate – not on the scale of classic Big data use cases but growing
Variety
• Not really – almost all data in wholesale banking is structured and well known
Veracity
• Not really – data quality is generally known and managed
Conclusion:
• Wholesale Banking is not a classic source of Big Data use cases and many of the analytic needs can and are solved with more traditional techniques
• Big Data tools can be leveraged to more effectively generate Business Insights and Analytic Insights
![Page 6: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/6.jpg)
Insightful Uses of Data
![Page 7: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/7.jpg)
It’s about turning the data noise into a clear and actionable signal.
Bram Hechtkopf
![Page 8: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/8.jpg)
Insightful Uses of Data
Price Optimization
• Hotels correlate prices to level of activity on their websites, weather, events
Improved Operational Efficiency
• UPS crafts optimal routes to reduce distance, time and fuel – delivery routes designed to minimize left turns
Markets of One – Ultimate Customization
• Top US retail banks analyze customer transaction to offer retailers the ability to customize promotions right on customer’s bank statement
• A major Indian telecom firm analyzes billions of call records daily to target customers for special offers, reducing churn and increasing loyalty
Know Your Customer – Better!
• Insurance companies use real time customer driving behavior gathered through devices installed in cars – signals of high risk include hard braking, accelerating, abrupt turns, miles driven in rush hour
Sources: Forbes, “Big Data Solving Big Problems” by Steve Olenski, March 2015 ; BCG Perspectives, “How to Get Started with Big Data” by Robert Souza, Rob Trollinger, Cornelius
Kaestner, David Potere and Jan Jamrich, May 2013 ; IBM Red Paper Performance and Capacity Implications for Big Data Nov 2013
![Page 9: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/9.jpg)
Polling Question #1
How far along is your organization in leveraging transactional data for business insights and decisions?
A. Very progressed and aligned with an organizational data strategy
B. Progress made through ad-hoc tools and analysis
C. Not yet using big data
![Page 10: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/10.jpg)
The Payments Data Opportunity
![Page 11: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/11.jpg)
Humans: 10% of Their Brain, Banks: 34% of Their Data
On The Banks’ Agenda
1 The Payments Data Opportunity
Banks have access to a large and valuable pool of payment and transaction data but they are
underutilizing this rich asset
![Page 12: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/12.jpg)
Polling Question #2
Where do you see the most value for data analysis for banks?
A. Risk Mitigation
B. Enhancing the Client Experience
C. Monetizing Payments
![Page 13: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/13.jpg)
Opportunities – Making the Most of the Payments Data
On The Banks’ Agenda Transforming Client Engagement
Regulatory Compliance and Enhanced Risk Management
By really understanding their clients and presenting value added information on their flows, banks can place themselves
at the core of their client’s strategy
Monetizing Payments
Optimize the pricing strategy of your payment flows and capture incremental revenue by converting cross border
payments to generate FX revenue
Successfully harnessing payments data can help banks achieve critical strategic objectives
In an increasingly complex and regulated environment the ability to manage the risk is directly linked to the visibility and
control you have over payment flows. Data analytics can provide this increased control, but also can be leveraged as a
reporting tools for regulatory submissions.
![Page 14: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/14.jpg)
Transforming Data into Insights Citi processes over 6 million daily transactions across 190 countries and 130 currencies with the
daily volume of $3 trillion…transforming a structured SWIFT message into field-by-field analysis
SWIFT Message Type
Sending Institution
Sender Country
Sender Institution
Payment Type
Receiving Institution
Value Date
Amount Currency
Debit Value Date
Credit Value Date
Debit Account
Credit Account
Debit Fees Credit Fees
Debit Amount Credit Amount
Debit Currency
Credit Currency
Originator BIC
Originator Address
IBK BIC
IBK Address
BBK BIC
BBK Address
Beneficiary BIC
Beneficiary Address
BBK Country
OUR/BEN/SHA
Field 72 details
Correspondent BIC
Correspondent Address
![Page 15: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/15.jpg)
Transforming Data into Insights
Insights
Selecting the right subset of fields to build business insights on…
![Page 16: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/16.jpg)
Data Analytics Solutions for our Bank Clients
FI Insights -
Payments
Benchmarking
Citi Use Cases
Predictive
Operational
Risk Analytics
3
Intraday
Liquidity
Monitoring
4
1 Optimize the pricing
strategy of your inbound
and outbound payment
flows to capture
incremental revenue
Citi’s Intraday Liquidity
Monitoring Tool drives
behavioral change for clients
and counterparties and assists
with regulatory reporting
Strengthen internal
controls and improve
safety and soundness
through Predictive
Operational Risk Analytics
Cross-Currency
Payments
2 Convert your cross
border wire transfers
and generate new FX
revenue streams
Treasury and Payments Expert
Track: Session 4 - Insights to Treasury Management
![Page 17: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/17.jpg)
Citi Payments Benchmarking
Compares your payment deductions to the market benchmark to optimize your pricing structure without impact on your local competitiveness
The Need
Lack of insight into payment flows in key markets
Unclear understanding of your pricing structure on USD payments in your market
Need to validate and optimize the pricing strategy of your inbound and outbound payment flows to capture incremental revenue opportunities
Simulate pricing by applying the market benchmark to your payment flows
Payments Benchmarking Key Benefits
▲ Gain market intelligence around your USD payments
▲ Optimize pricing of your deductions
▲ Remain competitive in local markets and identify potential red-flags to avoid the risk of pricing yourself out of the market
Market Charge Beneficiary Rate (CHB) Market Credit Fee Deduct Rate (CFD)
CHB
Benchmark Rate
CFD
Benchmark Rate
1
![Page 18: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/18.jpg)
Given its global footprint, Citi is uniquely positioned to obtain and share - in a fast and secure way - insights into your payments business……
…as well as intelligently mine data to help define market-appropriate pricing strategies
Evolving into…FI Insights 1
FI Insights Features
• Developed by the Citi Innovation Lab Miami
• Based on a Big Data model that consolidates multi-layer transaction information to drive Client Solutioning
• Provides intelligence around payment
flows:
- Originators
- Beneficiaries
- Value
- Volumes
- Trends
- Fees
- Peers Benchmarking
- Best Practices
![Page 19: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/19.jpg)
Citi leverages learnings from historical local payments traffic to optimize cross-border clearing and routing processes
Key Solution components
Recently developed tools for large data capture and standardization
Cross product / flow data reference engine allows to spot patterns only visible if payments data from different sources is analyzed jointly
Search engines allowing for usage/search in real time with unprecedented amounts of data while processing payments
Cross - Currency Clearing 2
Citi’s Cross Currency Clearing combines data from multiple sources with the expertise derived from our global network to produce a best in class intelligent cross currency clearing product.
Citi’s Cross Currency Clearing product identifies the currency of the
ultimate beneficiary’s account to help streamline the clearing process
and execute currency conversion upfront
Evolving further with
Payment Verification Database
![Page 20: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/20.jpg)
If we have data, let’s look at data. If all we have are opinions, let’s go with mine.
Jim Barksdale, former Netscape CEO
![Page 21: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/21.jpg)
Predictive Operational Risk Analytics 3
Identification and mitigation of potential risk events that can lead to financial and regulatory losses
– through a predictive model that is sustainable and can be evolved over time
Quick Approvals Dashboard Framework includes:
• Near Real-Time Integration
• Raw Data (structured & unstructured)
• Patterns and Correlation
• Objects and Events (internal & external)
• Actionable Insights
Tracking Manual Funds Transfer Instructions
![Page 22: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/22.jpg)
Polling Question #3
How important is the provision of data analytics tools as a differentiator for your corresponding banking business?
A. Very important
B. Important
C. Not a differentiator
![Page 23: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/23.jpg)
Where to Start…
![Page 24: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/24.jpg)
Polling Question #4
What is the biggest challenge facing your bank to better harness payments data?
A. Availability of investment funds
B. People – skill sets for advanced data analysis and interpretation
C. Data Quality – hard to standardize across systems for gold source
D. Organizational Readiness – end to end data strategy
![Page 25: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/25.jpg)
Errors using
inadequate data are
much less than
those using no data
at all.
Charles Babbage, British Mathematician and Inventor
![Page 26: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/26.jpg)
Where to Start?
There are a lot of answers – the key is asking the right question !
Start with advanced analytics before you start investing heavily in big data tools – test with a particular high priority business issue at hand
Examine Processes Carefully: data capture, validation, governance
Start w/Advanced Analytics before you invest in Big Data Tools
Build the Right Team: data, technology, business experts
Avoid Analysis Paralysis – Embrace decision making
Keep up w/Data Privacy Rules & Regulations
![Page 27: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/27.jpg)
If you torture the data long enough, it will confess to anything.
Ronald Harry Coase, Nobel Laureate in Economics
![Page 28: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/28.jpg)
Thank you
![Page 29: Contextualizing Payments Data - Banking with Citi | Citi.com€¦ · · 2015-10-14Contextualizing Payments Data Opportunities and Challenges ... high-velocity and high-variety information](https://reader031.vdocuments.net/reader031/viewer/2022020412/5aed5c267f8b9a366990cfaf/html5/thumbnails/29.jpg)