Rene Schuurman Global Market Management Channel Services Citi Treasury and Trade Solutions rene.schuurman@citi.com

Integration 2.0

Treasury and Trade Solutions

Ashish Chaughule, Global Product Manager for CitiConnect for SWIFT, Citi Treasury and Trade Solutions Ashish.chaughule@citi.com

The Digital Age, focusing on Integration

• Information drives innovation and growth

• Information leads to greater insight, higher customer satisfaction, accelerates time to market, helps to open new opportunities, and enables you to remain competitive

• Information is a key strategy component for every organization

• And integration is pivotal to deliver on the digital age promise

1

Corporate Technology Challenges

Corporations operating in a de-centralized technology environment on a regional or global basis encounter challenges in optimizing cost and operational efficiencies within treasury.

Decentralized Tech Environment

The plethora of different standards and connectivity protocols result in time consuming and costly bank integrations

Significant budget is required to manage multiple ERP Platforms

Multiple Banking Relationships

Current Corporate to Bank landscape is complex resulting in higher operational cost

Multiple H2H Connections Multiple E-Banking Applications

Regulatory Reporting

Impact of increased regulations requires structured and controlled processes.

Difficulty managing operational and audit processes

2

Technology as a Building Block to Drive Treasury Efficiency

• Cash Visibility • Cash Pooling • Bank Relationship • Interco Funding

Decentralized Treasury

Centralized Treasury

Operations

Commissionaire Structure

Re-invoicing Center

Netting Center

Shared Service Center

In-House Bank • Internal Bank Accounts

• Accounts Receivable • Accounts Payable • Accounting

• Interco Payments • Interco Collections • Interco Netting

• FX Management • Interest Management • Long-term Funding

Treasury Flows Commercial Flows Treasury & Commercial Flows

Degree of Centralization

Functions Centralized

Use technology innovation as an opportunity to build centralized structures that provide a strong foundation to drive efficiency while enhancing control for long-term sustainability of the organization

3

Connectivity Trends

Client Trends Reduce Total Cost of Ownership

– Connectivity is viewed as a commodity service – Budgets for bank integration under great pressure – Clients are price-buying

Reduce number of banking relations and bank interfaces – Desire for fewer connectivity solutions that provide access to

more services – Turn-key integration solutions for TWS and ERP

Need for real time and transparent data – Immediate status and account information – Switch from receiving basic updates to detailed transaction

information to support reconciliation

Bank Trends Concentration on online, SWIFT and file based solutions

– Connectivity solutions become enablers – Products becoming comprehensive offerings including treasury,

cash, liquidity, trade and commercial cards

Migration from proprietary development to industry collaboration – Simplification through standardization of formats, protocols,

security solutions – Multi Bank Transaction Initiation

Third Party Trends Seeking partnerships and alliances with banks and clients

Themes

Sustain transactional growth Continued investment

Simplify service offering Reduce complexity and streamline

transactional flows

Diversify CitiConnect Enable CitiConnect for

cross-product service offerings

4

Internet of Things (IoT)

Internet of Everything (Cisco),

Industrial Internet (GE Software),

Industry 4.0 (Siemens)

Machine to Machine (M2M) connectivity across the internet

“Any machine or device connected (via fixed wire or wireless communication) to the internet & being able to transmit information in one form or another”

5

Macro-Trend

Macro Economy

Low interest rate environment driving the need to create new fee based services.

TTS Digital Strategy

TTS Digital Strategy

Optimize business performance for Citi and

clients through rich

data and analytics

Expand channels and extend reach through mobile

technology

Deepen connections and bridge organizational

gaps through social collaboration tools

Deliver private cloud platforms and products that

enable channel & device expansion, and reduced cycle

times

Regulation

Transparency requirements driven by regulations driving the imperative to

provide more standardized & granular data.

Competition

Banks & non-traditional competitors not subject to the same regulations

expanding into transaction banking & pricing to win.

Globalization

Automation, standardization and centralization across banking

ecosystem; clients adopting new channels with end-to-end processing.

TTS Strategic Priorities

Drive competitive differentiation through innovative

digital products.

Effectively leverage our global scale to capture and digitize

financial flows.

Enable our clients to realize greater

organizational and commercial

value.

Citi’s global scale, combined with a commitment to a digital strategy, leveraging disruptive market trends, has made achieving a more efficient cash & trade management model more feasible & scalable than ever before.

6

Integrated Value of Citi’s Access Channels

1) Prepare

2) Initiate

3) Approve/Release

Transactions

4) Reconcile

5) Review/ Analyze/ Inquire

Tablet

Mobile

Mobile

File

Online

Online

File

Tablet

Accounting

Treasury Accounting

CFO

Treasury

7

File Format Standards – Selection Methodology

Citi offers a wide range of message and file formats to satisfy corporates’ needs.

What format is right for the

job?

Treasury Payments SWIFTNet FIN MT101, MT210

Vendor Payments & Collections

SAP IDOC, ANSI X12 EDIFACT (PAYMUL / DIRDEB) Bank Flat File, Custom formats

ISO 20022 XML pain.001 / 008

ISO 20022 XML camt.052 / 053 / 054

EDIFACT FINSTA BAI2, SAP MT940/MT942

Custom formats

SWIFTNet FIN MT940, MT942

ISO 20022 XML format family

Earlier industry standards and bank proprietary formats

Statements & Reconciliation

SWIFTNet FIN MT format family

SWIFTNet FIN MT format family

Earlier industry standards and bank proprietary formats

8

Case Study – CitiConnect ERP Integrator

“With Citi’s ERP Integrator solution, we have fully streamlined and automated our payment processes, resulting in immediate and ongoing cost savings. The successful and timely implementation would not have been possible without the expertise and experience of the team, and the flexibility of Citi’s implementation approach.”

Mr. Bo Xu CFO

Zhejiang Supor Co. Ltd.

ISO 20022

Payment File SAP ERP

Core Applications

Supor

CitiConnect

Citi ISO XML Template

Zhejiang Supor Co. Ltd (‘Supor’) is the leading cookware manufacturer in China and the second largest cookware manufacturer worldwide. In 2011, Supor centralized payments and collections into a Shared Service Center (SSC) for full automation leveraging its SAP installation. As well as secure and automate the transmission of payment instructions, against a very aggressive timescale.

9

Case Study – CitiConnect for SWIFT

“At Caterpillar it is vital to understand our exact funding needs, view our cash positions across all our accounts, and to be able determine our longer term liquidity strategy. SWIFT, and Citi’s CitiConnect channel have been instrumental in supporting our needs. As a result, operational savings and efficiencies have been realized by the Treasury team”

Assistant Treasury Manager Caterpillar

Caterpillar Inc., is an American corporation which designs, manufactures, markets and sells machinery and engines and sells financial products and insurance to customers via a worldwide dealer network. Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Caterpillar uses their Treasury Workstation to monitor their accounts and manage their treasury payments worldwide using the SWIFT network.

CitiConnect

10

Case Study – CitiConnect for Files (ISO 20022 XML & SWIFT)

“Now we’re importing bank statement information in real time for more than 330 bank accounts in all countries and regions in the world”

Senior Director of Global Cash Management Merck & Co.

Merck was looking for a solution that could establish universal cash processes across its network of 73 countries. The banking solution had to meet Merck’s plan to implement a single global ERP system and migrate payables and collections to shared service centers. Merck’s unified, standardized banking platform provides the firm with a single view of cash which has enabled greater control over global cash balances and improved liquidity management and forecasting

Payment File CitiConnect

SAP ERP

Account Statement File

ISO 20022 XML

11

Summary

Solutions such as SWIFT Corporate Access and the SAP Financial Services Network emerge as strategic initiative for the banks and service providers to establish closer relationships with corporate customers

The industry strives to satisfy the demand and address the challenges of corporate-to-bank integration through standardization

Together we can make the difference, partner on initiatives and elevate the corporate-to-bank integration to the next level

12

Why Citi?

Unmatched Experience

Core Strength

Global Reach

Drive to Innovation

Supports 1,200+ Shared Service Centers

300+ Corporates connected via SWIFT

Fast ERP integration

Cost efficiency of single BIC connectivity to all Citi branches

Advanced reporting solutions for straight-through reconciliation

Partnering with key providers

Unparalleled Payments and Receivables product set through single channel

Processing agility and capacity for large volumes

Consultative customer-centric approach

90 countries – the widest footprint in industry, supported through both CitiDirect BE and CitiConnect channels

130+ currencies Local presence and

experience, local language support

#1 in SWIFT volumes ISO 20022 XML messages

generating 25% of all file volumes

13

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