An Interview with Morgan McKenney, Head of Core Cash Management (Asia Pacific) and Head of Citi Innovation Lab (Singapore), Citibank

"The entire payments ecosystem has seen revolutionary change in recent years, with new technology, digitisation, and new
business models creating disruption and disintermediation across the value chain."

 

FST Media: What are the key challenges banks face in developing resilience technology?

We are at a time of unprecedented change, and financial services is in the midst of a digital transformation.

In the corporate and institutional space, the global rise of emerging market corporates and the expansion of global multinationals, including fast-growing e-commerce companies, has accelerated the development of sophisticated and innovative digital solutions, reflecting the transnational nature of these clients’ treasury and finance demands. These companies have growing appetite for efficient digital solutions that drive greater automation, market and customer access and autonomy in their treasury operations. This trend is driving disruption along established value chains.

In this rapidly evolving landscape, banks are racing to innovate and fintechs are working to scale. To succeed, banks, technology companies, and start-ups need to collaborate and share learnings, best practices and experiences to effectively leverage the respective strengths of each of these types of organisations.

The key to meeting evolving client needs is adaptation and innovation.The Bank of Tomorrow needs to be one that will digitally engage with clients, from pre-sales through to service, leverage a wide range of newer technologies to offer great client propositions end-to-end, and continuously embrace and adopt disruptive new propositions for targeted segments. We need to deliver a great client experience, innovation, scalability and operating model agility. From a digital strategy point of view, we are digitising our execution for profitable growth, digitising client engagement for competitive advantage, and creating new digital assets to drive longer term growth.

 

FST Media: What are your business and digital priorities over the next six months?

Being truly digital is fundamental to Citi’s strategy and we have been focused on creating the ability to innovate across our business. Globally, we have made a strategic commitment to increasing our investments in the digital space in the last few years, and we’ll continue to do so. Our investments are not just purely in dollar terms; we have invested in embedding a culture of innovation deep into the fabric and mindset of the company.

At Citi, we continuously invest in the next generation of technology infrastructure, intuitive user interfaces, and advanced online analytics that give companies unprecedented visibility over their treasury flows. We are early adopters in exciting areas such as robotics, predictive analytics, blockchain distributed ledger technologies, and mobility and digital identity solutions. Enhanced client experience, advanced data analytics and intelligence, and digital identity solutions, coupled with rapid convergence of mobile, online and API platforms, are the next frontier for institutional banking.

We will continue to be closely attuned to emerging technologies and their relevance for our institutional clients to adopt into our client propositions. We have a very client-centric approach to innovation and actively engage with our clients to co-create innovative, leading, and differentiated solutions for the global market.

Earlier this year, we launched API solutions for payment initiation, payment status, and account balance inquiries through CitiConnect, our industry leading connectivity platform. We support API-based integration across 96 countries, allowing us to offer our clients a variety of services in a dramatically different way, and for our clients to incorporate banking integration into their workflows and their client propositions, which is a major difference. Working with our clients to help them leverage the full value of our API capabilities will continue to be a key focus for us.

In May this year, we announced a pioneering blockchain and global banking integration with Nasdaq, a collaboration that enables straight-through payment processing and automates reconciliation by using a distributed ledger to record and transmit payment instructions. This disruptive and strategic solution enables Citi to support and enable newly emerging blockchain ecosystems, and continues to demonstrate our leadership in global payments space. 

 

FST Media: How are you leveraging big data and analytics to meet industry demand for customised products?

We have been transforming the client experience in recent years by better understanding client behaviour, introducing new technologies, challenging current operational concepts and, ultimately, providing clients with tailored solutions and products. Big data is critical to this.

We have been investing heavily in big data analytics and utilising it to drive internal efficiencies, offering better insights and advisory to clients, and developing customised solutions that are relevant to client needs.

Beyond the buzz of big data, what is crucial is how you put it to good and practical use. Citi’s value for clients is intelligently visualising the extensive data we have based on the global flows we support for our clients in a customised and tailored way, helping our clients identify revenue and efficiency opportunities.

In our Treasury and Trade Solutions Innovation Lab, based in Singapore, we have data scientists whose expertise in big data helps to provide insights for client-driven decision making, whilst corresponding analytics helps clients visualise customer solutions that most optimally suit their needs. We are combining the power of user experience with data science to develop more personalised experiences for our clients.

We are able to process this data through the numerous tools that we have developed and then offer insights and advice through various channels, including our online banking portal and tablet applications.

 

FST Media: Where will digital payments be in 2018?

The entire payments ecosystem has seen revolutionary change in recent years, with new technology, digitisation, and new business models creating disruption and disintermediation across the value chain.

I believe that we will continue to see rapid adoption of digital payments across the consumer and institutional space, with the continued entry of non-traditional players, new innovations, and both improved and new settlement mechanisms.

At Citi, we have been extremely active in supporting advancements in digital money around the world, including connecting into faster payments schemes globally, launching and extending our API suite for real-time payment initiation and information, connecting to alternative collections mechanisms important to our clients, and being one of the leading banks supporting SWIFT’s GPI initiative within correspondent banking to ensure same day value, payment status tracking, and transparency on fees. In addition, in partnership with Imperial College London, we have been developing leading research on digital money and engaging in active dialogues on progressing digital money globally.

 

FST Media: How are technology solutions enabling better business management practices?

Technology solutions are helping our clients build more competitive, efficient and global businesses.

From our conversations with our clients, including global multinationals, large emerging Asian corporates, fast-growing e-commerce companies, and digital players in our commercial banking business, CFOs and corporate treasurers are keeping a close watch on technology and digital disruption for risks and opportunities for their business.

Most of these clients are interested in how they can be more competitive, to grow even more successfully in Asia, and methods to grow their digital capabilities and efficiency. Our dedication to advancing treasury management e-solutions can help them deliver impactful results – this makes our products simpler, more convenient and flexible, and allows companies to have improved visibility over their treasury flows in a way that was not previously possible.

Demand for real-time information is growing, and we are seeing development in real-time clearing systems, growth in non-traditional payment instruments, such as mobile payments, and a significant rise in e-commerce activity within the region.

 

FST Media: What does it mean to stay ‘agile’ with digital initiatives?

Continuous adaption is key; I think one has to stay nimble and adaptive to change. A company that is focused on becoming a digital leader needs to reinvent itself – to be simpler, more streamlined, dramatically faster, be open to failing fast and learning, open to collaboration with external partners and clients, open-minded to new ideas, and be far more digital end-to-end. It also needs to foster a learning culture within the organisation that activates the power, diversity, energy, and talent of its people to stay agile.

We are focused on digitally engaging with our customers end-to-end, successfully leveraging newer technologies to offer great client propositions, and continuously embracing and adopting disruptive new propositions for targeted segments.

The old banking mindset was to scope out a huge project, put a big budget and large team against it, and anticipate results a few years down the road. Our mentality is very different today. We have put a lot of time and effort into changing our processes and work habits to focus intensely on client pain points and client context, embrace shorter timelines, early validation with clients, learning quickly, and accelerating delivery for our clients. 

We have invested in new ways of working and have set up new teams to focus on innovation; to this end, we have created a whole new ecosystem within Citi itself to ensure we lead in this space. What banks can learn from fintechs that we have adopted within Citi is a deep focus on client experience, innovation, scalability and operating agility.

 

FST Media: Where do you look for emerging technology trends?

The range of newer technologies available to leverage for client solutions include robotics, AI, blockchain, and cloud, which sit on top of a foundational base of wide internet availability, a significant increase in computing power, and widespread smartphone adoption.  

At Citi, we have a wide range of mechanisms to learn from the outside, as well as accelerating delivery from within. For example, we have Citi Ventures in Silicon Valley to accelerate innovation through strategic partnerships, and a comprehensive set of programs that combine the best of the external innovation ecosystem with Citi’s internal efforts to embrace new skills and new ways of working. Through our Ventures team, we invest in startups, pilot new technologies and test new solutions and business models in partnership with our Citi Innovation Labs and businesses.

We have an internal Acceleration Fund to promote rapid experimentation and discovery, particularly around the most disruptive business models and emerging technologies, such as blockchain technology and cryptocurrencies, wearables, the Internet of Things, next-generation commerce and authentication. Citi Ventures also funds proof-of-concept tests for startups, both within and outside of our Venture Investing portfolio, many of which involve partners’ solutions that, if successfully validated, progress to in-market pilots and, ultimately, commercialisation.

Our Citi Innovation Labs are an example of accelerating delivery of innovative solutions for clients. Located across the US, Ireland, Israel and Singapore, Citi Innovation Labs are pioneering and testing disruptive new solutions for our customers across our consumer and institutional client businesses.

We have also been extremely active in studying the potential of digital money and how we are – and should be – digitising them, where their experiential value promises to take us and what security, technology, regulatory and financial considerations they pose along the way. In partnership with Imperial College London, we have been developing leading research on digital money solutions. 

 

FST Media: What do you hope to get out of your involvement at the FST FutureTech event?

Innovation is both an art and a science and so meeting innovative people in their respective spaces is great for brainstorming opportunities!

 

FST Media: What do you enjoy doing outside of work?

I love a range of athletic activities, from hiking, skiing, football, biking and tennis. I'm also interested in policy, so I am a member of Council on Foreign Relations. I speak French conversationally and am learning Mandarin.

 

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