At the bustling Hong Kong Fintech Festival, surrounded by startups and fintech firms, Euromoney sits down with Shahmir Khaliq, Citi's head of services.
In September 2023, Citi announced a sweeping restructuring that eliminated regional layers, elevating five business segments to directly report to CEO Jane Fraser. These include services, markets, banking, wealth management, and US personal banking.
Services, led by Khaliq, is always referenced by CEO Fraser as the bank’s crown jewel. Within the services segment, treasury and trade solutions (TTS) continues to bring the largest portion of revenue, according to Citi’s latest earnings report.
Consolidating TTS and securities services under the services umbrella has created powerful synergies across Citi’s institutional client base. This integration enables Citi to offer more interconnected solutions, which in turn helps foster even stronger relationships with these clients. "If you're a large bank using Citi, you will manage custody and cash together through a singular window, right?" Khaliq explains. "Our large institutional bank clients would, therefore, like to have a singular conversation, a single touchpoint between custody services and cash management. The restructuring brings more efficiency for them to interact across different business segments and allows us to develop more connected products and better services.”
A client-centric approach
Based on assessment of their clients, Citi won over 60 categories in the Euromoney Cash Management Survey 2024.
Khaliq believes that the client-centric approach has been the driving force behind Citi's growth and evolution, ensuring the bank remains relevant as clients' needs and ambitions expand. "Our clients are the most sophisticated with global footprints, and the more we listen to them and help solve their questions and challenges, the more it helps us keep our network moving forward," Khaliq explains. "Client-centricity is really at the core of our entire infrastructure and global presence."
Citi's approach has had a direct impact on its strategy for launching new products. While all large global banks are investing heavily in the payments space, they're taking different paths, with some going all-in on distributed ledger and others doubling down on faster domestic payment systems. Citi, however, is taking a more holistic approach.
"What we try to do is give our clients as many options as possible," explains Khaliq. "This commitment is one reason why we lead in cross-border payments. There are a few principles that we employ for our services. Is our service available 24/7 and as close to real-time as possible? Does our service provide all the options that our clients want? Is our service the most cost-effective option?”
Every solution we develop starts with addressing the challenges of a handful of large clients
Citi is ensuring that its clients can have it all, whether it's connecting to wallets, blockchain-based platforms (where allowed by regulators), or other payment methods that enable bank accounts or card-based transactions.
"Every solution we develop starts with addressing the challenges of a handful of large clients," Khaliq says. "Once we have a working solution, we scale it up and commercialise it for all our clients. For us, unlike many others, innovation doesn't happen in the lab. Innovation comes from our clients, their needs, their priorities."
Citi's top priority is always driven by client demand. "The more our clients ask for a particular solution, the higher it rises on our priority list,"Khaliq adds.
Partnering in innovation
While fintech firms make headlines for their innovations in cross-border payments and trade finance, they depend on the infrastructure provided by major banks like Citi to support their operations. Establishing an independent back-end platform is costly and complex, particularly for fintechs aiming to scale globally.
Client-driven payments innovation
Payments Express, a cloud-enabled digital commerce solution was developed with three of Citi's largest global clients, using the bank’s proprietary technology stack. The solution allows clients to access and manage their funds in real time across multiple countries. It also enables Citi to process up to 100 times its transaction volume at a much lower cost. Payments Express is already live in five markets, with plans to expand to the top 30 markets, which account for over 90% of global commerce, within the next two to three years. Citi Token Services, a 24/7 USD clearing solution, or its application for the first-of-its-kind payments solution for international travellers in China, are among other examples of client-led initiatives that have become standard product offerings.
"Fintechs excel at building user-friendly front-end platforms, while banks provide the infrastructure to allow them access to clearing houses, clearing systems, domestic markets, and advisory on payments within each market. That’s what we do," Khaliq explains.
But fintechs are not only Citi’s partners and clients; they are also competitors. Khaliq candidly notes that Citi lost deals to fintechs in the supply chain finance space, but now they are winning them back by rebuilding the front-end and the entire solution process. The Nirvana platform is a testament to this, streamlining supplier onboarding and matching fintech efficiency.
"Our aspiration is to provide a comprehensive set of services to our clients regardless of competition from fintechs or other banks," says Khaliq.
International capabilities – a double-edged sword
54% of corporates participating in the Euromoney Cash Management Survey 2024 rated Citi’s international capabilities as excellent and there is no question in the market about the significance of the bank’s proprietary network. However, this brings challenges as well, especially when it comes to standardisation and offering international capabilities in a seamless way.
Client-centricity is really at the core of our entire infrastructure and global presence
Khaliq sees this as an opportunity to showcase Citi’s competitive edge. The bank’s proposition is offering local expertise to its clients, while opening doors for them to operate globally. "A lot of our clients engage with us globally or regionally, viewing Citi as a universal window providing standardised processes for all products and services across markets," says Khaliq. "They desire this standardised view because they have one ERP platform to connect with all markets. Our clients appreciate the efficiency of our standardised processes while adapting to in-country requirements."
