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Treasury and Trade Solutions
One World One Company Delivering Innovative Client Solutions ndash A Global Perspective Panel Discussion Panel Moderator Michael Guralnick Global Sales Head Corporate amp Public Sector Treasury amp Trade Solutions
Panelists Mark Tweedie EMEA Sales Head Treasury amp Trade Solutions Munir Nanji Asia Sales Head Treasury amp Trade Solutions
Ron Chakravarti Global Head Client Solutions amp Treasury Advisory Treasury amp Trade Solutions Carolina Juan Latin America Sales Head Treasury amp Trade Solutions
Mike Fossaceca North America Sales Head Treasury amp Trade Solutions
1
Whatrsquos on the Mind of the CFO and Treasurer for 20132014
Rapidly globalizing supply chains an evolving corporate finance environment and complex market forceshellip
Shift in supply chains to emerging markets is driving re-engineering of corporatesrsquo core operating models ndash with profound impact on Treasury
Fundamental regulatory changes are occurring globally regionally amp
locally Both restrictive amp liberalizing policies have direct effects on
Treasury
Mixed global economic outlook divergent interest rates and relaxed financial
markets call on Treasury to take a close look at liquidity funding cash investment
and working capital strategies
From Balance Sheet to Treasury Operations pressure to do more with less is driving adoption of practices
for greater efficiency and productivity
Globalization
Regulatory Upheaval
Market Conditions
Emphasis on Efficiency
Whatrsquos Driving
Change
2
Our Clients are Becoming More Global Everyday
3
The Expanding Role of Treasury The role of Treasury is expanding beyond liquidity FX and risk management to increased collaboration with commercial units and functions such as procurement sales and marketing to focus on working capital operational efficiency and operational risk management
WORKING CAPITAL MANAGEMENT
bull Partnering with procurement team to manage continuity of supply chainDPO
bull Support AP team to identify efficiencies in P2P process
bull Access alternative funding sources through trade financing
SUPPORTING SALES MARKETING TEAMS
bull DSO management through Trade Financing enabling sales team to offer preferential payment terms
bull Customer incentives to increase sales
bull Channel sales disbursements
CAPTIVE INSURANCE COMPANIES
bull Manage insurance risk in-house to save costs
CASH MANAGEMENT
bull Concentrate cash and reduce trapped cash where feasible
bull Improve cash forecasting
FINANCING
bull Reduce both short-term and long-term funding costs
bull Lower refinancing risks by spreading debt maturity profile
RISK MANAGEMENT
bull Mitigate FX interest and commodity risk in line with company treasury policy
bull Implement policies and clear governance monitor compliance
CASH MANAGEMENT
FINANCING
RISK MANAGEMENT
Time
bull Regulatory Change
ndash IOSCO OTC Derivatives reform
bull Eurozone crisis
bull Banking Industry Reform
ndash Dodd-Frank
ndash Basel III
ndash SEPA
bull Emerging Markets Expansion
ndash RMB Internationalization
ndash Financial Transaction Taxes
Important to partner with a bank with industry expertise network
coverage technology investment practical innovation flow
intermediation and tailored solutions
Triggers for Change
Inst
itu
tio
nal
Ro
le
4
Benchmarking Citi Treasury DiagnosticsSM Results
Based on survey responses from 450+ multinational corporates
Netting Center
Treasury Center
In-House Bank
Cash amp Funding
Risk Governance Systems
Shared Service Center
Accounts Payable
Accounts Receivable
Systems
Treasury Trends Working Capital Trends
11
4
4
8
9
15
23
26
Others
Chemicals
Fin Institutions
Healthcare
Energy
Technology
Consumer
Industrials
ASIA 25
EMEA 33
LATAM 6
NA 36
Emerging Market 24
Developed Market 76
Geography Industry Market
HQ Locations
Source Citi Treasury DiagnosticsSM 2013
2
1
3
5
The Treasurer Scorecard
Since the financial crisis the Treasurer Scorecard has grown both in scope and in complexity
CFO
Tax
Business
Regions
Accounting Operations
Shareholders
Treasurer
Preserve Capital
Provide Liquidity to
Network
Manage Risks
Manage Bank Relationships
Step up to Regulations
Focus on Balance
Sheet
Ensure Funding
Greater spread of capital across diverse markets currencies amp
counterparties
Just in Time Liquidity needs in
more markets
More liquidity capital FX
counterparty credit risks
More liquidity capital FX counterparty credit risks
Greater focus on balance sheet
health and shareholder
accountability
Local regional amp global regulations are changing rapidly
with greater balkanization
Access to diverse capital markets
6
Spotlight on Regional Trends amp Best Practices
6
7
Europe Middle East amp Africa (EMEA) ndash The Market amp Key Client Themes
The Market General bull 13 of worldrsquos wealth 80 of Oil amp Gas and 50 of the top 20
Sovereign Wealth Funds
bull GDP $17Tn with 052 growth
Economic bull Sentiment surveys improving with job creation in Eurozone H2
2014
bull Falling macro risk with rising economic optimism ndash ECB outright Monetary TransactionsEFSF provided market liquidity and eased debt costs
bull European Banks recapitalising to meet Basel III requirements and investing in sovereign debt
Political bull Middle East unrest - Egypt Syria Tunisia
bull 2013 elections in Germany and Italy - North South split
Legal Regulatory bull Single Euro Payments Area (SEPA) amp IBAN expansion
bull Basel III
bull Recovery and resolution planning
bull Currency Unions ndash eg EUR XOF
bull FX volatility CCY devaluations
bull Financial Transaction Taxes
The Silver Lining An Emerging Markets Story bull GDP growth rates better but softening
bull Urbanisation
bull Emerging middle class
bull Increasing share of global trade flows
bull Africa Foreign Direct Investment
bull RMB Internationalisation ndash London currency centre
The Clients
Pursuit of growth (EM vs DM)
Liquidity crunch and supply chain instability
Margin pressure
Risk management
Market amp regulatory change
Operational efficiency
Demographics amp Peer Comparison
bull Network cash management and SSC support
bull Rise in currency pooling and working capital management tools especially Supply Chain Finance
bull COGS reduction with intensified focus on business to business purchasing card and employee travel amp entertainment solutions
bull Increased visibility and mobilization of cash with mobile solutions for payment authorisation amp statements
bull SEPA readiness leadership role
bull Open dialogue on preferred asset and liability classes to best satisfy Basel III ratios
bull SWIFT XML SEPA Hub-to-hub account opening and subsidiary coverage acting as key enablers
bull Treasury Benchmarking and trading model financial flows optimization reviews
Key Client Themes Key TTS Solutions
8
EMEA Client Case Study Solutions for Centralization and MampA Activity
bull Following a number of acquisitions a leading healthcare company in Europe decided to rationalize the financial management of its European operations by implementing a single ERP system and establishing a Financial Shared Service Centre
bull The company wanted to reduce the number of banking relationships streamlining payments and collections processes and ensure greater control over liquidity
bull The company was also looking to leverage SEPA and restructure its bank accounts and connectivity formats
Client Need Citi Solution
Benefits to the Client
bull Citi provided standardized payments and collections processes on a fully integrated basis with the companyrsquos ERP system
bull For each country new accounts were opened and all European units were able to send payment files and direct debits via the ERP system which sends a bulk file to Citi Once payments are routed and executed Citi enriches MT940s with client remittance data to enable automated reconciliation
bull Citi assisted the company with a detailed SEPA review which enabled them to reduce the number of bank accounts and route more payments through SEPA
bull Citi is also providing centralized management of collections and automated end-of-day cross-border sweeping of funds into a single euro account for cash concentration purposes
bull The company has achieved substantial cost savings and improved external service quality through
o use of a single banking provider and a simplified European account structure
o high degree of control and process standardization
o improved liquidity management and forecasting capabilities
bull The company is further streamlining and standardizing processes through use of digital signatures and XML-based messaging
bull The company continues to add new countries to its centralized cash and payments infrastructure and has been able to integrate new acquisitions within a short timeframe
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
1
Whatrsquos on the Mind of the CFO and Treasurer for 20132014
Rapidly globalizing supply chains an evolving corporate finance environment and complex market forceshellip
Shift in supply chains to emerging markets is driving re-engineering of corporatesrsquo core operating models ndash with profound impact on Treasury
Fundamental regulatory changes are occurring globally regionally amp
locally Both restrictive amp liberalizing policies have direct effects on
Treasury
Mixed global economic outlook divergent interest rates and relaxed financial
markets call on Treasury to take a close look at liquidity funding cash investment
and working capital strategies
From Balance Sheet to Treasury Operations pressure to do more with less is driving adoption of practices
for greater efficiency and productivity
Globalization
Regulatory Upheaval
Market Conditions
Emphasis on Efficiency
Whatrsquos Driving
Change
2
Our Clients are Becoming More Global Everyday
3
The Expanding Role of Treasury The role of Treasury is expanding beyond liquidity FX and risk management to increased collaboration with commercial units and functions such as procurement sales and marketing to focus on working capital operational efficiency and operational risk management
WORKING CAPITAL MANAGEMENT
bull Partnering with procurement team to manage continuity of supply chainDPO
bull Support AP team to identify efficiencies in P2P process
bull Access alternative funding sources through trade financing
SUPPORTING SALES MARKETING TEAMS
bull DSO management through Trade Financing enabling sales team to offer preferential payment terms
bull Customer incentives to increase sales
bull Channel sales disbursements
CAPTIVE INSURANCE COMPANIES
bull Manage insurance risk in-house to save costs
CASH MANAGEMENT
bull Concentrate cash and reduce trapped cash where feasible
bull Improve cash forecasting
FINANCING
bull Reduce both short-term and long-term funding costs
bull Lower refinancing risks by spreading debt maturity profile
RISK MANAGEMENT
bull Mitigate FX interest and commodity risk in line with company treasury policy
bull Implement policies and clear governance monitor compliance
CASH MANAGEMENT
FINANCING
RISK MANAGEMENT
Time
bull Regulatory Change
ndash IOSCO OTC Derivatives reform
bull Eurozone crisis
bull Banking Industry Reform
ndash Dodd-Frank
ndash Basel III
ndash SEPA
bull Emerging Markets Expansion
ndash RMB Internationalization
ndash Financial Transaction Taxes
Important to partner with a bank with industry expertise network
coverage technology investment practical innovation flow
intermediation and tailored solutions
Triggers for Change
Inst
itu
tio
nal
Ro
le
4
Benchmarking Citi Treasury DiagnosticsSM Results
Based on survey responses from 450+ multinational corporates
Netting Center
Treasury Center
In-House Bank
Cash amp Funding
Risk Governance Systems
Shared Service Center
Accounts Payable
Accounts Receivable
Systems
Treasury Trends Working Capital Trends
11
4
4
8
9
15
23
26
Others
Chemicals
Fin Institutions
Healthcare
Energy
Technology
Consumer
Industrials
ASIA 25
EMEA 33
LATAM 6
NA 36
Emerging Market 24
Developed Market 76
Geography Industry Market
HQ Locations
Source Citi Treasury DiagnosticsSM 2013
2
1
3
5
The Treasurer Scorecard
Since the financial crisis the Treasurer Scorecard has grown both in scope and in complexity
CFO
Tax
Business
Regions
Accounting Operations
Shareholders
Treasurer
Preserve Capital
Provide Liquidity to
Network
Manage Risks
Manage Bank Relationships
Step up to Regulations
Focus on Balance
Sheet
Ensure Funding
Greater spread of capital across diverse markets currencies amp
counterparties
Just in Time Liquidity needs in
more markets
More liquidity capital FX
counterparty credit risks
More liquidity capital FX counterparty credit risks
Greater focus on balance sheet
health and shareholder
accountability
Local regional amp global regulations are changing rapidly
with greater balkanization
Access to diverse capital markets
6
Spotlight on Regional Trends amp Best Practices
6
7
Europe Middle East amp Africa (EMEA) ndash The Market amp Key Client Themes
The Market General bull 13 of worldrsquos wealth 80 of Oil amp Gas and 50 of the top 20
Sovereign Wealth Funds
bull GDP $17Tn with 052 growth
Economic bull Sentiment surveys improving with job creation in Eurozone H2
2014
bull Falling macro risk with rising economic optimism ndash ECB outright Monetary TransactionsEFSF provided market liquidity and eased debt costs
bull European Banks recapitalising to meet Basel III requirements and investing in sovereign debt
Political bull Middle East unrest - Egypt Syria Tunisia
bull 2013 elections in Germany and Italy - North South split
Legal Regulatory bull Single Euro Payments Area (SEPA) amp IBAN expansion
bull Basel III
bull Recovery and resolution planning
bull Currency Unions ndash eg EUR XOF
bull FX volatility CCY devaluations
bull Financial Transaction Taxes
The Silver Lining An Emerging Markets Story bull GDP growth rates better but softening
bull Urbanisation
bull Emerging middle class
bull Increasing share of global trade flows
bull Africa Foreign Direct Investment
bull RMB Internationalisation ndash London currency centre
The Clients
Pursuit of growth (EM vs DM)
Liquidity crunch and supply chain instability
Margin pressure
Risk management
Market amp regulatory change
Operational efficiency
Demographics amp Peer Comparison
bull Network cash management and SSC support
bull Rise in currency pooling and working capital management tools especially Supply Chain Finance
bull COGS reduction with intensified focus on business to business purchasing card and employee travel amp entertainment solutions
bull Increased visibility and mobilization of cash with mobile solutions for payment authorisation amp statements
bull SEPA readiness leadership role
bull Open dialogue on preferred asset and liability classes to best satisfy Basel III ratios
bull SWIFT XML SEPA Hub-to-hub account opening and subsidiary coverage acting as key enablers
bull Treasury Benchmarking and trading model financial flows optimization reviews
Key Client Themes Key TTS Solutions
8
EMEA Client Case Study Solutions for Centralization and MampA Activity
bull Following a number of acquisitions a leading healthcare company in Europe decided to rationalize the financial management of its European operations by implementing a single ERP system and establishing a Financial Shared Service Centre
bull The company wanted to reduce the number of banking relationships streamlining payments and collections processes and ensure greater control over liquidity
bull The company was also looking to leverage SEPA and restructure its bank accounts and connectivity formats
Client Need Citi Solution
Benefits to the Client
bull Citi provided standardized payments and collections processes on a fully integrated basis with the companyrsquos ERP system
bull For each country new accounts were opened and all European units were able to send payment files and direct debits via the ERP system which sends a bulk file to Citi Once payments are routed and executed Citi enriches MT940s with client remittance data to enable automated reconciliation
bull Citi assisted the company with a detailed SEPA review which enabled them to reduce the number of bank accounts and route more payments through SEPA
bull Citi is also providing centralized management of collections and automated end-of-day cross-border sweeping of funds into a single euro account for cash concentration purposes
bull The company has achieved substantial cost savings and improved external service quality through
o use of a single banking provider and a simplified European account structure
o high degree of control and process standardization
o improved liquidity management and forecasting capabilities
bull The company is further streamlining and standardizing processes through use of digital signatures and XML-based messaging
bull The company continues to add new countries to its centralized cash and payments infrastructure and has been able to integrate new acquisitions within a short timeframe
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
2
Our Clients are Becoming More Global Everyday
3
The Expanding Role of Treasury The role of Treasury is expanding beyond liquidity FX and risk management to increased collaboration with commercial units and functions such as procurement sales and marketing to focus on working capital operational efficiency and operational risk management
WORKING CAPITAL MANAGEMENT
bull Partnering with procurement team to manage continuity of supply chainDPO
bull Support AP team to identify efficiencies in P2P process
bull Access alternative funding sources through trade financing
SUPPORTING SALES MARKETING TEAMS
bull DSO management through Trade Financing enabling sales team to offer preferential payment terms
bull Customer incentives to increase sales
bull Channel sales disbursements
CAPTIVE INSURANCE COMPANIES
bull Manage insurance risk in-house to save costs
CASH MANAGEMENT
bull Concentrate cash and reduce trapped cash where feasible
bull Improve cash forecasting
FINANCING
bull Reduce both short-term and long-term funding costs
bull Lower refinancing risks by spreading debt maturity profile
RISK MANAGEMENT
bull Mitigate FX interest and commodity risk in line with company treasury policy
bull Implement policies and clear governance monitor compliance
CASH MANAGEMENT
FINANCING
RISK MANAGEMENT
Time
bull Regulatory Change
ndash IOSCO OTC Derivatives reform
bull Eurozone crisis
bull Banking Industry Reform
ndash Dodd-Frank
ndash Basel III
ndash SEPA
bull Emerging Markets Expansion
ndash RMB Internationalization
ndash Financial Transaction Taxes
Important to partner with a bank with industry expertise network
coverage technology investment practical innovation flow
intermediation and tailored solutions
Triggers for Change
Inst
itu
tio
nal
Ro
le
4
Benchmarking Citi Treasury DiagnosticsSM Results
Based on survey responses from 450+ multinational corporates
Netting Center
Treasury Center
In-House Bank
Cash amp Funding
Risk Governance Systems
Shared Service Center
Accounts Payable
Accounts Receivable
Systems
Treasury Trends Working Capital Trends
11
4
4
8
9
15
23
26
Others
Chemicals
Fin Institutions
Healthcare
Energy
Technology
Consumer
Industrials
ASIA 25
EMEA 33
LATAM 6
NA 36
Emerging Market 24
Developed Market 76
Geography Industry Market
HQ Locations
Source Citi Treasury DiagnosticsSM 2013
2
1
3
5
The Treasurer Scorecard
Since the financial crisis the Treasurer Scorecard has grown both in scope and in complexity
CFO
Tax
Business
Regions
Accounting Operations
Shareholders
Treasurer
Preserve Capital
Provide Liquidity to
Network
Manage Risks
Manage Bank Relationships
Step up to Regulations
Focus on Balance
Sheet
Ensure Funding
Greater spread of capital across diverse markets currencies amp
counterparties
Just in Time Liquidity needs in
more markets
More liquidity capital FX
counterparty credit risks
More liquidity capital FX counterparty credit risks
Greater focus on balance sheet
health and shareholder
accountability
Local regional amp global regulations are changing rapidly
with greater balkanization
Access to diverse capital markets
6
Spotlight on Regional Trends amp Best Practices
6
7
Europe Middle East amp Africa (EMEA) ndash The Market amp Key Client Themes
The Market General bull 13 of worldrsquos wealth 80 of Oil amp Gas and 50 of the top 20
Sovereign Wealth Funds
bull GDP $17Tn with 052 growth
Economic bull Sentiment surveys improving with job creation in Eurozone H2
2014
bull Falling macro risk with rising economic optimism ndash ECB outright Monetary TransactionsEFSF provided market liquidity and eased debt costs
bull European Banks recapitalising to meet Basel III requirements and investing in sovereign debt
Political bull Middle East unrest - Egypt Syria Tunisia
bull 2013 elections in Germany and Italy - North South split
Legal Regulatory bull Single Euro Payments Area (SEPA) amp IBAN expansion
bull Basel III
bull Recovery and resolution planning
bull Currency Unions ndash eg EUR XOF
bull FX volatility CCY devaluations
bull Financial Transaction Taxes
The Silver Lining An Emerging Markets Story bull GDP growth rates better but softening
bull Urbanisation
bull Emerging middle class
bull Increasing share of global trade flows
bull Africa Foreign Direct Investment
bull RMB Internationalisation ndash London currency centre
The Clients
Pursuit of growth (EM vs DM)
Liquidity crunch and supply chain instability
Margin pressure
Risk management
Market amp regulatory change
Operational efficiency
Demographics amp Peer Comparison
bull Network cash management and SSC support
bull Rise in currency pooling and working capital management tools especially Supply Chain Finance
bull COGS reduction with intensified focus on business to business purchasing card and employee travel amp entertainment solutions
bull Increased visibility and mobilization of cash with mobile solutions for payment authorisation amp statements
bull SEPA readiness leadership role
bull Open dialogue on preferred asset and liability classes to best satisfy Basel III ratios
bull SWIFT XML SEPA Hub-to-hub account opening and subsidiary coverage acting as key enablers
bull Treasury Benchmarking and trading model financial flows optimization reviews
Key Client Themes Key TTS Solutions
8
EMEA Client Case Study Solutions for Centralization and MampA Activity
bull Following a number of acquisitions a leading healthcare company in Europe decided to rationalize the financial management of its European operations by implementing a single ERP system and establishing a Financial Shared Service Centre
bull The company wanted to reduce the number of banking relationships streamlining payments and collections processes and ensure greater control over liquidity
bull The company was also looking to leverage SEPA and restructure its bank accounts and connectivity formats
Client Need Citi Solution
Benefits to the Client
bull Citi provided standardized payments and collections processes on a fully integrated basis with the companyrsquos ERP system
bull For each country new accounts were opened and all European units were able to send payment files and direct debits via the ERP system which sends a bulk file to Citi Once payments are routed and executed Citi enriches MT940s with client remittance data to enable automated reconciliation
bull Citi assisted the company with a detailed SEPA review which enabled them to reduce the number of bank accounts and route more payments through SEPA
bull Citi is also providing centralized management of collections and automated end-of-day cross-border sweeping of funds into a single euro account for cash concentration purposes
bull The company has achieved substantial cost savings and improved external service quality through
o use of a single banking provider and a simplified European account structure
o high degree of control and process standardization
o improved liquidity management and forecasting capabilities
bull The company is further streamlining and standardizing processes through use of digital signatures and XML-based messaging
bull The company continues to add new countries to its centralized cash and payments infrastructure and has been able to integrate new acquisitions within a short timeframe
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
3
The Expanding Role of Treasury The role of Treasury is expanding beyond liquidity FX and risk management to increased collaboration with commercial units and functions such as procurement sales and marketing to focus on working capital operational efficiency and operational risk management
WORKING CAPITAL MANAGEMENT
bull Partnering with procurement team to manage continuity of supply chainDPO
bull Support AP team to identify efficiencies in P2P process
bull Access alternative funding sources through trade financing
SUPPORTING SALES MARKETING TEAMS
bull DSO management through Trade Financing enabling sales team to offer preferential payment terms
bull Customer incentives to increase sales
bull Channel sales disbursements
CAPTIVE INSURANCE COMPANIES
bull Manage insurance risk in-house to save costs
CASH MANAGEMENT
bull Concentrate cash and reduce trapped cash where feasible
bull Improve cash forecasting
FINANCING
bull Reduce both short-term and long-term funding costs
bull Lower refinancing risks by spreading debt maturity profile
RISK MANAGEMENT
bull Mitigate FX interest and commodity risk in line with company treasury policy
bull Implement policies and clear governance monitor compliance
CASH MANAGEMENT
FINANCING
RISK MANAGEMENT
Time
bull Regulatory Change
ndash IOSCO OTC Derivatives reform
bull Eurozone crisis
bull Banking Industry Reform
ndash Dodd-Frank
ndash Basel III
ndash SEPA
bull Emerging Markets Expansion
ndash RMB Internationalization
ndash Financial Transaction Taxes
Important to partner with a bank with industry expertise network
coverage technology investment practical innovation flow
intermediation and tailored solutions
Triggers for Change
Inst
itu
tio
nal
Ro
le
4
Benchmarking Citi Treasury DiagnosticsSM Results
Based on survey responses from 450+ multinational corporates
Netting Center
Treasury Center
In-House Bank
Cash amp Funding
Risk Governance Systems
Shared Service Center
Accounts Payable
Accounts Receivable
Systems
Treasury Trends Working Capital Trends
11
4
4
8
9
15
23
26
Others
Chemicals
Fin Institutions
Healthcare
Energy
Technology
Consumer
Industrials
ASIA 25
EMEA 33
LATAM 6
NA 36
Emerging Market 24
Developed Market 76
Geography Industry Market
HQ Locations
Source Citi Treasury DiagnosticsSM 2013
2
1
3
5
The Treasurer Scorecard
Since the financial crisis the Treasurer Scorecard has grown both in scope and in complexity
CFO
Tax
Business
Regions
Accounting Operations
Shareholders
Treasurer
Preserve Capital
Provide Liquidity to
Network
Manage Risks
Manage Bank Relationships
Step up to Regulations
Focus on Balance
Sheet
Ensure Funding
Greater spread of capital across diverse markets currencies amp
counterparties
Just in Time Liquidity needs in
more markets
More liquidity capital FX
counterparty credit risks
More liquidity capital FX counterparty credit risks
Greater focus on balance sheet
health and shareholder
accountability
Local regional amp global regulations are changing rapidly
with greater balkanization
Access to diverse capital markets
6
Spotlight on Regional Trends amp Best Practices
6
7
Europe Middle East amp Africa (EMEA) ndash The Market amp Key Client Themes
The Market General bull 13 of worldrsquos wealth 80 of Oil amp Gas and 50 of the top 20
Sovereign Wealth Funds
bull GDP $17Tn with 052 growth
Economic bull Sentiment surveys improving with job creation in Eurozone H2
2014
bull Falling macro risk with rising economic optimism ndash ECB outright Monetary TransactionsEFSF provided market liquidity and eased debt costs
bull European Banks recapitalising to meet Basel III requirements and investing in sovereign debt
Political bull Middle East unrest - Egypt Syria Tunisia
bull 2013 elections in Germany and Italy - North South split
Legal Regulatory bull Single Euro Payments Area (SEPA) amp IBAN expansion
bull Basel III
bull Recovery and resolution planning
bull Currency Unions ndash eg EUR XOF
bull FX volatility CCY devaluations
bull Financial Transaction Taxes
The Silver Lining An Emerging Markets Story bull GDP growth rates better but softening
bull Urbanisation
bull Emerging middle class
bull Increasing share of global trade flows
bull Africa Foreign Direct Investment
bull RMB Internationalisation ndash London currency centre
The Clients
Pursuit of growth (EM vs DM)
Liquidity crunch and supply chain instability
Margin pressure
Risk management
Market amp regulatory change
Operational efficiency
Demographics amp Peer Comparison
bull Network cash management and SSC support
bull Rise in currency pooling and working capital management tools especially Supply Chain Finance
bull COGS reduction with intensified focus on business to business purchasing card and employee travel amp entertainment solutions
bull Increased visibility and mobilization of cash with mobile solutions for payment authorisation amp statements
bull SEPA readiness leadership role
bull Open dialogue on preferred asset and liability classes to best satisfy Basel III ratios
bull SWIFT XML SEPA Hub-to-hub account opening and subsidiary coverage acting as key enablers
bull Treasury Benchmarking and trading model financial flows optimization reviews
Key Client Themes Key TTS Solutions
8
EMEA Client Case Study Solutions for Centralization and MampA Activity
bull Following a number of acquisitions a leading healthcare company in Europe decided to rationalize the financial management of its European operations by implementing a single ERP system and establishing a Financial Shared Service Centre
bull The company wanted to reduce the number of banking relationships streamlining payments and collections processes and ensure greater control over liquidity
bull The company was also looking to leverage SEPA and restructure its bank accounts and connectivity formats
Client Need Citi Solution
Benefits to the Client
bull Citi provided standardized payments and collections processes on a fully integrated basis with the companyrsquos ERP system
bull For each country new accounts were opened and all European units were able to send payment files and direct debits via the ERP system which sends a bulk file to Citi Once payments are routed and executed Citi enriches MT940s with client remittance data to enable automated reconciliation
bull Citi assisted the company with a detailed SEPA review which enabled them to reduce the number of bank accounts and route more payments through SEPA
bull Citi is also providing centralized management of collections and automated end-of-day cross-border sweeping of funds into a single euro account for cash concentration purposes
bull The company has achieved substantial cost savings and improved external service quality through
o use of a single banking provider and a simplified European account structure
o high degree of control and process standardization
o improved liquidity management and forecasting capabilities
bull The company is further streamlining and standardizing processes through use of digital signatures and XML-based messaging
bull The company continues to add new countries to its centralized cash and payments infrastructure and has been able to integrate new acquisitions within a short timeframe
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
4
Benchmarking Citi Treasury DiagnosticsSM Results
Based on survey responses from 450+ multinational corporates
Netting Center
Treasury Center
In-House Bank
Cash amp Funding
Risk Governance Systems
Shared Service Center
Accounts Payable
Accounts Receivable
Systems
Treasury Trends Working Capital Trends
11
4
4
8
9
15
23
26
Others
Chemicals
Fin Institutions
Healthcare
Energy
Technology
Consumer
Industrials
ASIA 25
EMEA 33
LATAM 6
NA 36
Emerging Market 24
Developed Market 76
Geography Industry Market
HQ Locations
Source Citi Treasury DiagnosticsSM 2013
2
1
3
5
The Treasurer Scorecard
Since the financial crisis the Treasurer Scorecard has grown both in scope and in complexity
CFO
Tax
Business
Regions
Accounting Operations
Shareholders
Treasurer
Preserve Capital
Provide Liquidity to
Network
Manage Risks
Manage Bank Relationships
Step up to Regulations
Focus on Balance
Sheet
Ensure Funding
Greater spread of capital across diverse markets currencies amp
counterparties
Just in Time Liquidity needs in
more markets
More liquidity capital FX
counterparty credit risks
More liquidity capital FX counterparty credit risks
Greater focus on balance sheet
health and shareholder
accountability
Local regional amp global regulations are changing rapidly
with greater balkanization
Access to diverse capital markets
6
Spotlight on Regional Trends amp Best Practices
6
7
Europe Middle East amp Africa (EMEA) ndash The Market amp Key Client Themes
The Market General bull 13 of worldrsquos wealth 80 of Oil amp Gas and 50 of the top 20
Sovereign Wealth Funds
bull GDP $17Tn with 052 growth
Economic bull Sentiment surveys improving with job creation in Eurozone H2
2014
bull Falling macro risk with rising economic optimism ndash ECB outright Monetary TransactionsEFSF provided market liquidity and eased debt costs
bull European Banks recapitalising to meet Basel III requirements and investing in sovereign debt
Political bull Middle East unrest - Egypt Syria Tunisia
bull 2013 elections in Germany and Italy - North South split
Legal Regulatory bull Single Euro Payments Area (SEPA) amp IBAN expansion
bull Basel III
bull Recovery and resolution planning
bull Currency Unions ndash eg EUR XOF
bull FX volatility CCY devaluations
bull Financial Transaction Taxes
The Silver Lining An Emerging Markets Story bull GDP growth rates better but softening
bull Urbanisation
bull Emerging middle class
bull Increasing share of global trade flows
bull Africa Foreign Direct Investment
bull RMB Internationalisation ndash London currency centre
The Clients
Pursuit of growth (EM vs DM)
Liquidity crunch and supply chain instability
Margin pressure
Risk management
Market amp regulatory change
Operational efficiency
Demographics amp Peer Comparison
bull Network cash management and SSC support
bull Rise in currency pooling and working capital management tools especially Supply Chain Finance
bull COGS reduction with intensified focus on business to business purchasing card and employee travel amp entertainment solutions
bull Increased visibility and mobilization of cash with mobile solutions for payment authorisation amp statements
bull SEPA readiness leadership role
bull Open dialogue on preferred asset and liability classes to best satisfy Basel III ratios
bull SWIFT XML SEPA Hub-to-hub account opening and subsidiary coverage acting as key enablers
bull Treasury Benchmarking and trading model financial flows optimization reviews
Key Client Themes Key TTS Solutions
8
EMEA Client Case Study Solutions for Centralization and MampA Activity
bull Following a number of acquisitions a leading healthcare company in Europe decided to rationalize the financial management of its European operations by implementing a single ERP system and establishing a Financial Shared Service Centre
bull The company wanted to reduce the number of banking relationships streamlining payments and collections processes and ensure greater control over liquidity
bull The company was also looking to leverage SEPA and restructure its bank accounts and connectivity formats
Client Need Citi Solution
Benefits to the Client
bull Citi provided standardized payments and collections processes on a fully integrated basis with the companyrsquos ERP system
bull For each country new accounts were opened and all European units were able to send payment files and direct debits via the ERP system which sends a bulk file to Citi Once payments are routed and executed Citi enriches MT940s with client remittance data to enable automated reconciliation
bull Citi assisted the company with a detailed SEPA review which enabled them to reduce the number of bank accounts and route more payments through SEPA
bull Citi is also providing centralized management of collections and automated end-of-day cross-border sweeping of funds into a single euro account for cash concentration purposes
bull The company has achieved substantial cost savings and improved external service quality through
o use of a single banking provider and a simplified European account structure
o high degree of control and process standardization
o improved liquidity management and forecasting capabilities
bull The company is further streamlining and standardizing processes through use of digital signatures and XML-based messaging
bull The company continues to add new countries to its centralized cash and payments infrastructure and has been able to integrate new acquisitions within a short timeframe
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
5
The Treasurer Scorecard
Since the financial crisis the Treasurer Scorecard has grown both in scope and in complexity
CFO
Tax
Business
Regions
Accounting Operations
Shareholders
Treasurer
Preserve Capital
Provide Liquidity to
Network
Manage Risks
Manage Bank Relationships
Step up to Regulations
Focus on Balance
Sheet
Ensure Funding
Greater spread of capital across diverse markets currencies amp
counterparties
Just in Time Liquidity needs in
more markets
More liquidity capital FX
counterparty credit risks
More liquidity capital FX counterparty credit risks
Greater focus on balance sheet
health and shareholder
accountability
Local regional amp global regulations are changing rapidly
with greater balkanization
Access to diverse capital markets
6
Spotlight on Regional Trends amp Best Practices
6
7
Europe Middle East amp Africa (EMEA) ndash The Market amp Key Client Themes
The Market General bull 13 of worldrsquos wealth 80 of Oil amp Gas and 50 of the top 20
Sovereign Wealth Funds
bull GDP $17Tn with 052 growth
Economic bull Sentiment surveys improving with job creation in Eurozone H2
2014
bull Falling macro risk with rising economic optimism ndash ECB outright Monetary TransactionsEFSF provided market liquidity and eased debt costs
bull European Banks recapitalising to meet Basel III requirements and investing in sovereign debt
Political bull Middle East unrest - Egypt Syria Tunisia
bull 2013 elections in Germany and Italy - North South split
Legal Regulatory bull Single Euro Payments Area (SEPA) amp IBAN expansion
bull Basel III
bull Recovery and resolution planning
bull Currency Unions ndash eg EUR XOF
bull FX volatility CCY devaluations
bull Financial Transaction Taxes
The Silver Lining An Emerging Markets Story bull GDP growth rates better but softening
bull Urbanisation
bull Emerging middle class
bull Increasing share of global trade flows
bull Africa Foreign Direct Investment
bull RMB Internationalisation ndash London currency centre
The Clients
Pursuit of growth (EM vs DM)
Liquidity crunch and supply chain instability
Margin pressure
Risk management
Market amp regulatory change
Operational efficiency
Demographics amp Peer Comparison
bull Network cash management and SSC support
bull Rise in currency pooling and working capital management tools especially Supply Chain Finance
bull COGS reduction with intensified focus on business to business purchasing card and employee travel amp entertainment solutions
bull Increased visibility and mobilization of cash with mobile solutions for payment authorisation amp statements
bull SEPA readiness leadership role
bull Open dialogue on preferred asset and liability classes to best satisfy Basel III ratios
bull SWIFT XML SEPA Hub-to-hub account opening and subsidiary coverage acting as key enablers
bull Treasury Benchmarking and trading model financial flows optimization reviews
Key Client Themes Key TTS Solutions
8
EMEA Client Case Study Solutions for Centralization and MampA Activity
bull Following a number of acquisitions a leading healthcare company in Europe decided to rationalize the financial management of its European operations by implementing a single ERP system and establishing a Financial Shared Service Centre
bull The company wanted to reduce the number of banking relationships streamlining payments and collections processes and ensure greater control over liquidity
bull The company was also looking to leverage SEPA and restructure its bank accounts and connectivity formats
Client Need Citi Solution
Benefits to the Client
bull Citi provided standardized payments and collections processes on a fully integrated basis with the companyrsquos ERP system
bull For each country new accounts were opened and all European units were able to send payment files and direct debits via the ERP system which sends a bulk file to Citi Once payments are routed and executed Citi enriches MT940s with client remittance data to enable automated reconciliation
bull Citi assisted the company with a detailed SEPA review which enabled them to reduce the number of bank accounts and route more payments through SEPA
bull Citi is also providing centralized management of collections and automated end-of-day cross-border sweeping of funds into a single euro account for cash concentration purposes
bull The company has achieved substantial cost savings and improved external service quality through
o use of a single banking provider and a simplified European account structure
o high degree of control and process standardization
o improved liquidity management and forecasting capabilities
bull The company is further streamlining and standardizing processes through use of digital signatures and XML-based messaging
bull The company continues to add new countries to its centralized cash and payments infrastructure and has been able to integrate new acquisitions within a short timeframe
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
6
Spotlight on Regional Trends amp Best Practices
6
7
Europe Middle East amp Africa (EMEA) ndash The Market amp Key Client Themes
The Market General bull 13 of worldrsquos wealth 80 of Oil amp Gas and 50 of the top 20
Sovereign Wealth Funds
bull GDP $17Tn with 052 growth
Economic bull Sentiment surveys improving with job creation in Eurozone H2
2014
bull Falling macro risk with rising economic optimism ndash ECB outright Monetary TransactionsEFSF provided market liquidity and eased debt costs
bull European Banks recapitalising to meet Basel III requirements and investing in sovereign debt
Political bull Middle East unrest - Egypt Syria Tunisia
bull 2013 elections in Germany and Italy - North South split
Legal Regulatory bull Single Euro Payments Area (SEPA) amp IBAN expansion
bull Basel III
bull Recovery and resolution planning
bull Currency Unions ndash eg EUR XOF
bull FX volatility CCY devaluations
bull Financial Transaction Taxes
The Silver Lining An Emerging Markets Story bull GDP growth rates better but softening
bull Urbanisation
bull Emerging middle class
bull Increasing share of global trade flows
bull Africa Foreign Direct Investment
bull RMB Internationalisation ndash London currency centre
The Clients
Pursuit of growth (EM vs DM)
Liquidity crunch and supply chain instability
Margin pressure
Risk management
Market amp regulatory change
Operational efficiency
Demographics amp Peer Comparison
bull Network cash management and SSC support
bull Rise in currency pooling and working capital management tools especially Supply Chain Finance
bull COGS reduction with intensified focus on business to business purchasing card and employee travel amp entertainment solutions
bull Increased visibility and mobilization of cash with mobile solutions for payment authorisation amp statements
bull SEPA readiness leadership role
bull Open dialogue on preferred asset and liability classes to best satisfy Basel III ratios
bull SWIFT XML SEPA Hub-to-hub account opening and subsidiary coverage acting as key enablers
bull Treasury Benchmarking and trading model financial flows optimization reviews
Key Client Themes Key TTS Solutions
8
EMEA Client Case Study Solutions for Centralization and MampA Activity
bull Following a number of acquisitions a leading healthcare company in Europe decided to rationalize the financial management of its European operations by implementing a single ERP system and establishing a Financial Shared Service Centre
bull The company wanted to reduce the number of banking relationships streamlining payments and collections processes and ensure greater control over liquidity
bull The company was also looking to leverage SEPA and restructure its bank accounts and connectivity formats
Client Need Citi Solution
Benefits to the Client
bull Citi provided standardized payments and collections processes on a fully integrated basis with the companyrsquos ERP system
bull For each country new accounts were opened and all European units were able to send payment files and direct debits via the ERP system which sends a bulk file to Citi Once payments are routed and executed Citi enriches MT940s with client remittance data to enable automated reconciliation
bull Citi assisted the company with a detailed SEPA review which enabled them to reduce the number of bank accounts and route more payments through SEPA
bull Citi is also providing centralized management of collections and automated end-of-day cross-border sweeping of funds into a single euro account for cash concentration purposes
bull The company has achieved substantial cost savings and improved external service quality through
o use of a single banking provider and a simplified European account structure
o high degree of control and process standardization
o improved liquidity management and forecasting capabilities
bull The company is further streamlining and standardizing processes through use of digital signatures and XML-based messaging
bull The company continues to add new countries to its centralized cash and payments infrastructure and has been able to integrate new acquisitions within a short timeframe
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
7
Europe Middle East amp Africa (EMEA) ndash The Market amp Key Client Themes
The Market General bull 13 of worldrsquos wealth 80 of Oil amp Gas and 50 of the top 20
Sovereign Wealth Funds
bull GDP $17Tn with 052 growth
Economic bull Sentiment surveys improving with job creation in Eurozone H2
2014
bull Falling macro risk with rising economic optimism ndash ECB outright Monetary TransactionsEFSF provided market liquidity and eased debt costs
bull European Banks recapitalising to meet Basel III requirements and investing in sovereign debt
Political bull Middle East unrest - Egypt Syria Tunisia
bull 2013 elections in Germany and Italy - North South split
Legal Regulatory bull Single Euro Payments Area (SEPA) amp IBAN expansion
bull Basel III
bull Recovery and resolution planning
bull Currency Unions ndash eg EUR XOF
bull FX volatility CCY devaluations
bull Financial Transaction Taxes
The Silver Lining An Emerging Markets Story bull GDP growth rates better but softening
bull Urbanisation
bull Emerging middle class
bull Increasing share of global trade flows
bull Africa Foreign Direct Investment
bull RMB Internationalisation ndash London currency centre
The Clients
Pursuit of growth (EM vs DM)
Liquidity crunch and supply chain instability
Margin pressure
Risk management
Market amp regulatory change
Operational efficiency
Demographics amp Peer Comparison
bull Network cash management and SSC support
bull Rise in currency pooling and working capital management tools especially Supply Chain Finance
bull COGS reduction with intensified focus on business to business purchasing card and employee travel amp entertainment solutions
bull Increased visibility and mobilization of cash with mobile solutions for payment authorisation amp statements
bull SEPA readiness leadership role
bull Open dialogue on preferred asset and liability classes to best satisfy Basel III ratios
bull SWIFT XML SEPA Hub-to-hub account opening and subsidiary coverage acting as key enablers
bull Treasury Benchmarking and trading model financial flows optimization reviews
Key Client Themes Key TTS Solutions
8
EMEA Client Case Study Solutions for Centralization and MampA Activity
bull Following a number of acquisitions a leading healthcare company in Europe decided to rationalize the financial management of its European operations by implementing a single ERP system and establishing a Financial Shared Service Centre
bull The company wanted to reduce the number of banking relationships streamlining payments and collections processes and ensure greater control over liquidity
bull The company was also looking to leverage SEPA and restructure its bank accounts and connectivity formats
Client Need Citi Solution
Benefits to the Client
bull Citi provided standardized payments and collections processes on a fully integrated basis with the companyrsquos ERP system
bull For each country new accounts were opened and all European units were able to send payment files and direct debits via the ERP system which sends a bulk file to Citi Once payments are routed and executed Citi enriches MT940s with client remittance data to enable automated reconciliation
bull Citi assisted the company with a detailed SEPA review which enabled them to reduce the number of bank accounts and route more payments through SEPA
bull Citi is also providing centralized management of collections and automated end-of-day cross-border sweeping of funds into a single euro account for cash concentration purposes
bull The company has achieved substantial cost savings and improved external service quality through
o use of a single banking provider and a simplified European account structure
o high degree of control and process standardization
o improved liquidity management and forecasting capabilities
bull The company is further streamlining and standardizing processes through use of digital signatures and XML-based messaging
bull The company continues to add new countries to its centralized cash and payments infrastructure and has been able to integrate new acquisitions within a short timeframe
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
8
EMEA Client Case Study Solutions for Centralization and MampA Activity
bull Following a number of acquisitions a leading healthcare company in Europe decided to rationalize the financial management of its European operations by implementing a single ERP system and establishing a Financial Shared Service Centre
bull The company wanted to reduce the number of banking relationships streamlining payments and collections processes and ensure greater control over liquidity
bull The company was also looking to leverage SEPA and restructure its bank accounts and connectivity formats
Client Need Citi Solution
Benefits to the Client
bull Citi provided standardized payments and collections processes on a fully integrated basis with the companyrsquos ERP system
bull For each country new accounts were opened and all European units were able to send payment files and direct debits via the ERP system which sends a bulk file to Citi Once payments are routed and executed Citi enriches MT940s with client remittance data to enable automated reconciliation
bull Citi assisted the company with a detailed SEPA review which enabled them to reduce the number of bank accounts and route more payments through SEPA
bull Citi is also providing centralized management of collections and automated end-of-day cross-border sweeping of funds into a single euro account for cash concentration purposes
bull The company has achieved substantial cost savings and improved external service quality through
o use of a single banking provider and a simplified European account structure
o high degree of control and process standardization
o improved liquidity management and forecasting capabilities
bull The company is further streamlining and standardizing processes through use of digital signatures and XML-based messaging
bull The company continues to add new countries to its centralized cash and payments infrastructure and has been able to integrate new acquisitions within a short timeframe
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
9
Asia Pacific ndash The Market amp Key Client Themes
Regulatory Reform
Paper to Electronic Movement
Standardization and Connectivity
bull Slowdown in Asian growth story China GDP growth rate slows to 75 in 2013 after average growth of around 10 pa in past three decades Structural reform needed to move to a more sustainable growth model
bull Malaysia and Thailand experiencing slower growth India and Indonesia have seen sharp decline in currencies from concerns over current account deficits
bull Bank of Japan has undertaken aggressive monetary easing to weaken the yen with global impact beyond Japan
Political bull China leadership transition has completed paving the way for
China to act in unity on economic and political matters over the next 5 years
bull Political flux in Asia Malaysiarsquos divisive election result may slow down economic reforms North Korea rhetoric to South Korea amp US General elections in India in 2014
Regulatory
bull Shanghai Free Trade Zone
bull China RMB internationalization
o PBOC program to simplify RMB cross-border transactions enables corporates to access excess RMB liquidity onshore
o Simplification of supporting document requirements for Foreign Currency cross-border payments
o SAFE pilot program allows cross border pooling netting paymentsreceivables on behalf
bull Malaysia putting in place new incentives for MNCs to locate their Treasury Management Centres in Malaysia
Automation through Technology
Liquidity Management
Supply Chain Management
The Market The Clients
bull Treasury and cash extraction solutions
bull Reduce cash and checks move towards mobile amp digitization
bull Drive towards XML file format amp SWIFT connectivity
bull Usage of Virtual Accounts Lockboxes Cash Sweeping
bull Enhanced liquidity management solutions for China
bull In-house banks and treasury centres for regional funding
bull Supplier amp Distributor Financing due to tighter credit markets
Key Client Themes Key TTS Solutions
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
10
Asia Client Case Study Commercial Cards Solution for Operational Efficiency
Client Need Citi Solution
bull A top tier Chinese company was exploring implementation of a centralized expense management model and cards based solution for its business units globally
bull The key objective of the project was to centrally manage the global expenses of the firm in order to lower costs and achieve centralized controls and reporting
bull The company wanted to enhance its internal expense management system set up a technical interface with a global banking partner and standardize the expense management and reporting process across all business units globally
bull Citi provided a global Commercial Cards solution to the company for all its overseas subsidiaries with a global contract in consistent format and clauses with a phased rollout with a few pilot countries in the beginning
bull Citi implemented a single technical interface to deliver the data to the companyrsquos expense management system
bull The project management was led by a global team based in Asia along with a working group in China both speaking Mandarin They worked on document negotiation technical implementation and training
bull Citi has also discussed a Shared Service Centre (SSC) concept with the company and shared best practices of global SSCs to to look beyond expense centralization
bull The company has achieved centralized controls and management through a standardised card application and expense claim management process
bull Cost savings through competitive pricing provided by Citi across all countries improved bargaining power with travel agencies by using the global expense information and data through the report provided by Citi
bull FX exposure minimized through Citirsquos local currency card issuance capabilities in over 30 countries
bull Host to host connection with the Bank to achieve straight through processing operational efficiencies and better information security
bull Professional Citi service team in home country and region leading global communication and rollout with other countries and regions
Benefits to the Client
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
11
Japan ndash The Market amp Key Client Themes
Globalization of Treasury
Liquidity Optimization
Working Cap Optimization
Ensuring Compliance
Cost Efficiency
Solution Innovation
The Clients
bull Scalable global platforms and solutions
bull Global liquidity structures cash optimization
bull Paperless cross-border supply chain financing
bull Electronic data security and paperless solutions
bull SSC advisory and integration expertise
bull MCNPCIOeRMS auto payment mapping
bull Money Lending License Central bank reporting
Key Client Themes Key TTS Solutions
Meeting Regulation
The Market
Economic Forecasts 2013 2014 2015
4Q F 4Q F 1Q F
Real GDP(1) 350 060 -040
CPI 08 24 24
Unemployment Rate 39 39 39
Japan YenUS$ 99 105 105
10-Yr JGB (Period Ave) 065 07 09
Late Breaking News
bull PM Abe made final decision to implement consumption tax hike (April 2014) - we are skeptical policy measures will adequately mitigate negatives
bull Wage negotiations in spring are key for next year
bull We expect additional easing in 2014 in the wake of disappointing wage data and impacts from consumption tax hike
Core Inflation YoY Note Core inflation is the PCE deflator ex food and energy for the US CPI ex fresh food and energy for EMU and Japan Sources DataStream and Citi Research
(1) YoY Year-to-year percent change F Forecast Note All forecasts are for end of period unless specified Source Citi Research Global Economic Outlook and Strategy October 2013
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
12
NA MNC Client Case Study Global Liquidity Management
Global media company implementing IHB - looking to consolidate banking activities globally including Japan Key requirements included bull Real time visibility and access to cash through
global platform bull Integrated liquidity management from local subs to
global IHB bull Consolidated payments processing from offshore
SSC with single global file
Client Need Citi Solution
Benefits to the Client
Based on their Trading Model we delivered
bull Local ZBA structure between subs and onshore non-resident header account held by IHB avoiding Money Lending License requirement
bull Reporting to support cash control and total visibility and control of JPY
bull Connectivity with ISO XML20022 file handling and Payment Mapping - non-Japanese speakers initiate authorize in English while payments locally executed in Japanese
bull Consolidation of tax and payroll payments with payroll processor using segregated access to CitiDirect
Achieving goals with optimum treasury operating efficiency and cost savings bull Globally standardized treasury operation through a single banking platform bull Optimized liquidity management with elimination of manual monitoring and funding of short subsidiaries bull Improved visibility and control of liquidity with single JPY position held by IHB and managed online bull Elimination of costs of maintaining multiple local banking platforms operating processes and IT development bull Savings from centralizing treasury operations to low-cost offshore location while achieving global standardization of treasury
operating processes risk mitigation and controls bull Enhanced cross-regional Business Continuity Plans
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
13
Latin America ndashThe Market amp Key Client Themes
Perspectives
bull Activity remains in positive terrain although a
deceleration in the pace of growth is becoming evident
across Latin America
bull Inflation is sitting comfortably within the regionrsquos
central banksrsquo targets at the moment with the
exception of Argentina and Venezuela
bull Due to the deterioration of the external situation and
that inflation is under control most central banks in the
region have started to provide stimulus
bull Two engines running at different speeds an
accelerating US low speed engine and a decelerating
China high speed engine will likely affect availability
of International liquidity and capital inflows to EM with
the same intensity as before
bull The consequence for Latam is a potential reversal of
fortunes relative to the previous episode with the
North becoming more dynamic than the South this
time around
Estimated growth of consumer spending in Latin America in the next 3 years
Latin Americarsquos mobile phone penetration Only 10 to 15 of devices are smart phones The rapid shift in smartphone adoption is driving the development of 4G networks across the region
Latin Americarsquos planned expenditure in infrastructure between 2013-2018
8 - 12 pa
110
+450bn
The Market The Clients
Key Client Themes Key TTS Solutions
Regional and Global Companies Consolidating Expanding in Latam
bull Liquidity management solutions
bull Mobile amp digitization solutions
bull Cards based solutions
bull Automation solutions eg Brazil tax payments
bull Electronic Banking and Connectivity solutions
bull Shared services
centralization solutions
bull Trade finance solutions
bull Export Agency finance solutions
+450bn RTCSSC
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
14
Latin America Client Case Study Integrated Payments Solution
bull Global corporation needing an international platform linked with local knowledge and technical flexibility to deliver an integrated Payments platform in the region
bull Route payments via the most efficient low cost clearing stream in each market
bull Emerging market champion looking to deliver Treasury centralization initiative to improve cash management by gaining control and visibility locally and globally
bull Reduce liquidity risk along with cumbersome and inefficient processes within Treasury
Client Need Citi Solution
Benefits to the Client
bull Citi delivered a host to host solution with full payments ERP integration via Citi File Exchange
bull Citirsquos on the ground presence allowed us to conduct in-country workshops to facilitate market understanding and clarity on accessing the local clearing systems in each scope market
bull Implementing CitiDirect and Citi Paylink treasury has been able to gain invaluable access to information on the availability of funds across all accounts
bull A single technology interface coupled with CitiDirect for payment processing delivered visibility into payment status and reporting allowing the four-member treasury team to better manage funding and execution of payments
bull In this complex multi-country and multi-entity project Citi used its implementation and project management expertise to ensure effective execution
bull Enhanced visibility and control of its payments in Latin America and has significantly reduced costs associated with manual transactions
bull By centralizing all cash flows with Citi in LATAM and globally Treasury is now able to more effectively manage global liquidity from the centralised treasury in Panama
bull The greater control offered by the Citi solutions treasury has improved access to information enabling them to make better faster cash management decisions
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
15
North America ndash The Market amp Key Client Themes
Regulatory Reform Basel III Dodd-Frank etc
Paper to Electronic Movement
Facilitate B2C C2B Transactions
United States bull US GDP grew by an annualized rate of 28 in the third quarter of
2013
bull US government debt of $12T (over 100 of GDP) and continued uncertainty about US fiscal policy have heightened business uncertainty
bull Unemployment rate edged down to 73 in August a 45 year low
bull Regulations aimed at strengthening the financial system continue to move forward
bull Lower investment spending despite large cash holdings ($15T) on corporate balance sheets
bull Unlimited FDIC insurance coverage for non-interest bearing transaction accounts expired on Dec 31 2012 creating flight to banks with strong capital ratios
bull The Fedrsquos continued policy of monetary easing (through successive use of asset purchases with its Quantitative Easings) will ensure low interest rates for the foreseeable future
Canada
bull Canadian banks remain highly rated
bull GDP in July growth in July was 06 (the highest in 2 years) and projected growth for the entire 2013 is now 20
bull Fiscal consolidation is still underway and net exports are weighing on growth
bull Externally focused downside risks will keep the Bank of Canada on the sidelines overnight rate will remain at 1 for the time being
Financial Supply Chain Management
Clients Building Up Liquidity
Increased CAPEX MampA amp Infrastructure Spend
The Market The Clients
bull Optimize liquidity structures
bull Focus on efficiency and vertical integration Payment Exchange Present and Pay Commercial Cards
bull Digitization of order-to-cash and payment processing
bull Collect and utilize consumer data to optimize market spend and integrate mobile solutions
bull Facilitate Client Supply Chain Financing
bull Provide diverse investment options as corporate cash level are at historic highs
bull Global capabilities delivered locally (cards payments receivables Citiconnect)
Key Client Themes Key TTS Solutions
Standardization and Connectivity
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-
16
NA Client Case Study Digital Solutions for Receivables amp Payments
bull A large integrated healthcare provider wanted to enhance their client payment experience by providing emerging presentment and payment options
bull The healthcare provider also wanted to streamline their remittance and reconciliation processing by eliminating paper remittances and checks
bull In addition they wanted to achieve greater efficiencies in their accounts payables process by converting check payments to digital payments
Client Need Citi Solution
Benefits to the Client
bull Citi Present and Pay enabled their clients to retrieve their bills online and make payments through a fully branded website touch-tone phone customer service representative or mobile device Payment options included ACH Credit Card and Debit Card
bull Citi Payment Exchange provided a turn key check to electronic payment conversion process The customized supplier onboarding managed by Citi focused on a ldquoCards Firstrdquo approach Early payment incentives were introduced to accelerate the migration to cards and maximizing card rebates and the introduction of ACH to reduce costs for suppliers who do not accept card payments
bull Citi Present and Pay enabled the company to achieve an enhanced client experience and substantial cost savings through bull Offering the consumers flexible options for both recurring and one-time payments bull Accelerated funds availability and maximized use of funds bull Reduced processing costs through increased electronic adoption and elimination of printing and postage costs bull Comprehensive customizable MIS reporting updated in real-time
bull Citi Payment Exchange enabled the company to take greater control of their AP process and achieve working capital benefits bull Increased spend and rebates from their purchase card program bull Significant reduction in paper check volume and outsourcing of residual check print process which was performed in house bull Reduction in administrative costs required to manage suppliers and the investigation processes (claim of payment
non-receipt change of payment information remittance delivery)
17
Questions
17
- Slide Number 1
- Slide Number 2
- Slide Number 3
- Slide Number 4
- Slide Number 5
- Slide Number 6
- Slide Number 7
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Slide Number 17
- Slide Number 18
-