As a global bank, holistic global connectivity will matter most in the digital era and whether or not you build and own it shouldn’t matter, according to Citi’s Scott Southall in a conversation with finews.asia.
The explosion of innovation in digital banking ranging from blockchain to big data has created many new sub-sectors within financial technology. Even with deep pockets and top talent, this leap will not be easily replicable simply within the confines of a traditional bank.
«When I first started in banking, the industry tried to build and own everything. Since then, the tide has really turned,» said Scott Southall, APAC head of innovation for the bank’s trade and treasury solutions (TTS) arm.
«Especially when we’re dealing with cutting edge tech, banks tend to be more mainstream in terms of their core stack. In contrast, fintechs tend to be nimbler in adopting new technologies and more market-specific.»
Be Honest With Yourself
Just like how a client would currently expect a global bank to have physical presence in various locations worldwide, the future era of the industry will demand the same sort of presence digitally. User experience and pricing aside, an entrepreneur with global payment needs may have no choice but to opt for providers with access to the most markets.
«You have to be very honest and ask yourself, for example: am I going to build connectivity to every wallet in every market?» Southall questions rhetorically.
«And frankly, in a lot of these cases, the answer is no. We used to be a traditional trade and cash management business but we recognized that in order to be the global platform of choice for digital commerce, we have to become the network of networks. Whether that’s connecting to digital wallets or alternative payment systems, partnerships are going to be key.»
«Last-Mile Capability»
Nonetheless, Citi's presence and size still makes it capable of some technological adaptation and internal development. In fact, Southall said that many of the fintechs have acted as solutions to close gaps for specific functions – rather than fully replace building from scratch – in a role he called a «last-mile capability».
«We’ve got operations in close to 100 markets and there is organic innovation that is occurring everywhere,» he explained.
«But where fintechs have become incredibly critical is for what we call «last-mile capability», where they help resolve specific problems which clients have cited in specific markets.»
Citi Accelerator: 3,500 Fintechs
As part of its efforts to seek last-mile capabilities, the bank launched a three-day accelerator last week that saw pitches received from over 3,500 fintechs.
The accelerator was aimed at resolving issues around three consistent themes in China, Korea and Australia: seamless payments and receivables; the future of open banking; and data empowerment.
The initial list was shortlisted to 140 before a dozen were selected to address these specific issues.
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