Payments and treasury are two sides of the same coin. Payments teams are responsible for the customer journey – payments into a company and sometimes disbursements to sellers, app developers, content creators, or vendors. Their role usually includes working with banks and other providers to ensure money moves into and out of the company’s accounts correctly and efficiently.

Treasurers are responsible for managing cash, ensuring the efficient flow of funds, and ensuring that things like currency conversion are not eroding margins. Fintechs often have those goals and are usually searching for a bank sponsor who understands what they are trying to build.

Debopama Sen, Head of Payments at Citi Treasury and Trade Solutions, joins us for this episode to explore how treasury and payments professionals can collaborate on opportunities presented by the evolving payments landscape.

Yvette Bohanan:

Welcome to Payments On Fire, a podcast from Glenbrook Partners about the payments industry, how it works, and trends in its evolution.

Hello, I’m Yvette Bohanan, a partner at Glenbrook and your host for this episode of Payments On Fire. Did you ever organize a dinner party with friends in high hopes for a great evening filled with amazing conversation and then, well, it just didn’t work. Everyone had a lot in common, but the conversation never got off the ground. I felt that way at times in professional settings too, bringing payments teams, product engineering or operations together with treasury teams, or in some cases fintechs with treasury services teams from banks. You would think there would be so much to talk about. After all, payments and treasury are two sides of the same coin. Payments teams are responsible for the customer journey, payments into a company and sometimes disbursements to sellers, app developers, content creators, or vendors.

Their role usually includes working with banks and other providers to ensure money moves into and out of the company’s accounts correctly and efficiently. Treasurers are responsible for managing cash, ensuring the efficient flow of funds, and ensuring that things like currency conversion are not eroding margins. Fintechs often have these goals and are usually searching for a bank sponsor who understands what they are trying to build. There’s a lot of fertile ground for conversation and collaboration in all of this. In this episode, we’re delving into some table topics that might help if you find yourself in a future meeting that is like one of those awkward dinner party conversations. So pull out your pen and paper, think about a guest list, and let’s get started.

You might be wondering who I would choose to help generate a lively conversation. Well, I’m delighted to introduce Debopama Sen, head of payments in the Treasury and Trade Solutions business within Citi Services. Debo, welcome to Payments on Fire.

Debopama Sen:

Thank you for having me, Yvette.

Yvette Bohanan:

We always like to start our conversations with the questions, how did you arrive in payments? And you have had a very interesting career journey. Can you tell me a little bit about your journey and your current leadership focus within Citi?

Debopama Sen:

Absolutely. Yvette, I’ve been at Citi for over 28 years, and I’ve worked in many areas of the bank. I’ve worked in security services. I had a lot to do with capital markets. I’ve worked in payments for a long time. I’ve worked in trade finance and liquidity management solutions, so across the length and breadth of a lot of things we do for our corporate and institutional mid-market clients. And I’ve also worked in India, in Singapore, and most recently in the US. But in all of the roles that I’ve performed, I’ve always been fascinated how payments play such an integral part to any commercial support or any commercial transaction that happens in the world, any commerce that you do between two or three parties. The difference very often in that experience can be made by how well the payments work as part of it or how badly they did. So I’ve always been fascinated by that aspect. So it’s no surprise that when I was given the opportunity to run payments for all of Citi with its 95 country network all over the world, I completely jumped at the chance.

Yvette Bohanan:

That’s incredible. And yes, they can be an enabler and a disabler, right? It’s the moment of truth no matter what the interaction is. So it’s a great observation. When you talk about your experience, I think about India, Singapore, the ASEAN region, what is your perspective on the progress that’s being made to modernize payments? What have you really seen there that’s sort of caught your attention in the last five years or so?

Debopama Sen:

It really is very, very interesting and I think I’ve been lucky to be part of some really wonderful journeys in the payments world. I’ll go back to perhaps in a couple of decades ago almost when India launched a company called National Payments Corporation of India, which eventually powered UPI, which is perhaps one of the largest instant payment schemes in the world today. Citi was one of the founder members, the 10 founder members of NPCI. And between the years 2013 to 2018, I was fortunate to be very much part of that entire journey.

During the time actually when UPI was being launched, it was really a figment of people’s imagination and then it became real and then we scaled it over the next few years. And today the scheme handles 12 billion payments a day. So if you take a step back and you think about that early leadership that was done by some of these countries and the core driver at the heart of it for many of these countries, whether it’s Singapore, whether it was India, whether it was Vietnam, Thailand, and obviously when you move out of Asia, whether it is many of the Latin American countries, what you see in Brazil, the key driver for many of these markets has been driving financial inclusion.

Yvette Bohanan:

Absolutely. Yeah.

Debopama Sen:

Really important strategic move towards doing that. And that’s why we’ve seen the evolution of these very sophisticated banking system-led payment schemes, which make it very easy for the unbanked to integrate into the system. And that’s where I think it’s been a really interesting journey.

Yvette Bohanan:

Everyone talks about being at the right place in the right time. I think at the founding of NPCI in India, I don’t even know what that is. It’s a once-in-a-lifetime experience, but it’s a nexus where there must’ve been some uncertainty. It was very aspirational for what was trying to be done at that time. I think people look at UPI now and they say, “Oh, it’s this huge success.” It wasn’t a guaranteed success when it was being created and formed and as it emerged, right? There was a lot of uncertainty in that whole environment.

Debopama Sen:

Absolutely, Yvette. And I think there was a vision, I think it was a very bold vision, and that bold vision came on the back of another vision, which was on its way to being realized, which was really creating the digital identity called Aadhaar, where it was already on its way to being successful and some of the same minds that created that sort of put together the UPI vision. But I think it was a bold vision, but there was absolutely no guarantee of success. And I’ve seen this play out again and again, Yvette, sticking a little bit close to my Asia experience. You look at the China market with the wallet ecosystem and how that has evolved over time.

You look at some of the smaller ASEAN markets. Thailand, for example, has a very sophisticated instant payments scheme called PromptPay, which has huge adoption. Almost everyone in the market uses it. And off late, what we’ve seen in Brazil with Pix and what we are also seeing in the US with RTP and FedNow, and this does not for a moment eliminate what is also happening with the wallet ecosystem, what’s happening with cross-border payments. So we can go on, but I think the real point is some of these governments and regulators that started with the vision of financial inclusion and using digital payments as a driver to create financial inclusion, I think some of these have been very successful and there’s a lot that we can build on from here.

Yvette Bohanan:

Yeah. And I think there’s a tremendous amount to build on. I think it’s also changing how we think about payments in a very fundamental way globally. So all of these systems are 24/7, which it’s very sad to be sitting here in 2024 and saying, “Oh, we have these systems that are now 24/7, 365,” but here we are. And that’s a very notable feature. As companies are expanding their market presence and the new payment systems roll out, one of the questions that comes to mind is what should treasurers and payments professionals be asking each other to make a fruitful conversation and to really take advantage of this moment in time where all of these systems are really starting to hum to come together and to really work for each country?

Debopama Sen:

That’s a great question and it’s a topic that does require a lot more conversation, I feel, as we look at the evolution of payment systems around the world. What started as almost a revolution with consumer payments or individual payments of person-to-person payments, that whole experience of being 24 by seven, very easy to use on demand, has now started translating very much into the world of commerce as more and more commerce moves online. And that is equally driving a translation into the world of moving large value payments around the world 24/7 because it starts with one end of the value chain and eventually has to end up with the other end of the value chain. At Citi ourselves, we’ve been very focused on this phenomenon and how we can help our clients there.

So as we think about what’s happening in this entire revolution to 24/7 always on, I think there are three or four areas that are very important for treasurers and payment professionals and companies to talk to each other about. One is I think the most efficient treasuries or the most effective treasuries rather, are the ones in my personal experience that I’ve seen, are the ones that define themselves as an enabler for business to really adapt and use the new tools available, but yet manage the risk in a very balanced way. So I think treasuries at all companies need to be really spending a lot of time studying and understanding what are some of the new phenomenas that are happening? What are these new instant payment schemes that are developing? What are the users or new tools like APIs and open banking that can enable their businesses and their suppliers to actually engage more effectively with the corporate?

And on the flip side, payment professionals and commercial folks at corporates need to understand a few things as well. They need to understand the implications that if they want to offer a whole plethora of payment options to their consumers or they want to offer a lot of flexibility to their partners and their suppliers, then what are the implications of those on risk management? What are the implications of those on counterparty risks? What are the implications of those on liquidity management and fund forecasting for their treasury teams?

Another area that I find is often under or overlooked rather, Yvette, is the fact that as commerce moves online and in a way almost gets democratized because now you have a lot of small merchants and consumers who are directly able to participate in the commercial flow without going through a series of intermediaries, you are now seeing a huge miniaturization of payments. That is a phenomenon that is well recognized, and I’m sure you come across that all the time.

Now, what that means for corporates who are now participating in this commerce going online is that the entire ecosystem for a treasurer of dealing with miniaturized payments, what does that mean for reconciliation? What does that mean for fraud management? What does that mean for the volume and capacity of even treasury management systems, which now has to then deal with a huge amount of data? And what does that mean for the technology strategy? I think all of these things are areas where payments professionals, commercial professionals, and treasury professional need to really sit together and think through these implications for companies as they embrace the new way of doing commerce.

Yvette Bohanan:

And so just in case our listeners are not familiar with this notion of the miniaturization of payments, and I think that’s a really interesting way to think about it because I think the treasurer perspective on that is probably most impactful as you’re articulating to the treasury professional. But talk a little bit more about how that happens. How do you get to a point where you’re sitting in the treasurer seat at a corporation and you’re faced with that? What does that look like to you and what’s happened in your world?

Debopama Sen:

Yes. So let me perhaps start articulating that with a real-world example and then perhaps go on to what it means for treasury. If I were an auto manufacturer, auto OEM a few years ago, I would be making best-in-class vehicles, automobiles. I would be selling them to very large distributors or counter-parties, and then they would then take care of the downstream sales to showrooms or to other counter-parties who would then deal with the retail individual or the high net worth individual. Similarly, as the auto OEM I’d be dealing with the largest suppliers and they would be further dealing with the smaller suppliers down the chain. What that means is, as far as payments are concerned, they would be large value payments, which I would be making maybe on a Friday on a batch basis to my suppliers. And on the customer side, I would be receiving wires from time to time, which again would be large value payments.

Today as an auto OEM manufacturer, I might be giving out a subscription model to my consumers. So I might be directly giving a subscription model to my consumers and they’ll be making small payments for daily usage, for monthly usage of the automobile. Some of the largest auto OEMs are setting up marketplaces where they bring their dealers, their distributors and their customers, and their dealers or some of their other counterparts in the supply chain are providing services on an ongoing basis to the consumer. And all of these payments are much, much smaller, much more frequent, much more 24 by 7, 365 on demand, usually on weekends compared to the previous example.

So now as a treasurer, where I only had to set up systems or I had to set up the ability to reconcile a finite set of large value payments coming in at very predictable times, and I would have to attribute that to who has paid this, can I free up their working capital limits so that I can do more business with them? I now have to do all of this including fund forecasting for payments to my suppliers, which I’m making every Friday, for example. I now have to do all of this on a real-time ongoing 24-hour basis with thousands and thousands of payments that are coming into my system both in and out.

So that completely changes the tech capability I need. I can have very little reliance on manual processes. It completely changes the sophistication of my data strategy where I need to sit down with my IT team and my data team and understand how I’m going to get really richness, capture the richness of the information that is now available in payment systems. Today’s payment systems offer much more richness of information that comes in with a payment than they used to probably a few years ago.

How do I take advantage of that richness and actually turn this potential change which could cause problems? How do I turn that into an advantage for my business? Because not only do I now have automated strategies to reconcile all of this and to fund forecasting and to manage liquidity around the world, but I also use the richness of the data to give insights to my business. Who’s paying on time? Is this a good customer to deal with? Who’s having trouble? What are they using it for? Because I’m not getting richer information. What time of day are they paying? So imagine the world and the possibilities that it opens up, but as treasurers, we have to embrace this and really be enablers for our business in this journey.

Yvette Bohanan:

It’s a job description change that’s, I don’t think anything quite like this has happened in the last 50 years for the treasury team. I mean, things were fairly status quo in a sense in terms of what treasury’s function was for many years. Right. And when did this really start to occur, this whole phenomenon of miniaturization? When did you see this pop up on the radar? Is businesses coming to you? Is treasury clients coming to you and saying, “Help, my world has just started spinning in the opposite direction and I need something from you?”

Debopama Sen:

It’s interesting when we think about it because I would say that there’s still a very wide spectrum. We deal with thousands of large institutional and mid-market corporates and financial institutions and banks. Citi serves about 1500 banks around the world and some of the world’s largest e-commerce companies, but also traditional companies that are now seeing the change happening in their backyard. If I step back a little bit, I would say this has been going on for a few years, but even today there’s a wide spectrum of clients who are at various stages of that evolution depending on the industry they’re in, depending on whether they’re a first mover or they’re a fast follower, or in some countries and some sectors and segments, the electronification of commerce is still a little bit behind. So it really depends on which segment, which industry, which market they are in. But certainly there’s a wide spectrum and there are some of our clients are at one end of the spectrum and some are probably just beginning their journey of this whole trend that we are seeing.

Yvette Bohanan:

Yeah. What you’re talking about really makes me reflect on 20 years ago when the internet was just starting out, there were a handful of companies trying to solve B2B payments on the web at very early days, and they had all the right ideas. The technology was vastly different. There was no cloud, very different world that we were living in, but they all were trying to tackle this sort of how can we come together? How can we make payments more efficient? How can we go direct to consumer? All of these things were buzzing around in 1999, 2000, 2001.

Your comment earlier when we started talking about payments can be an enabler or disabler, wow, that’s really important here because I think it was payments that were holding those companies back 20 years ago, and now not only are they enabling this change, this shift in go to market strategies and sales strategies and distribution strategies, but they’re actually giving the treasury function and the payments function the opportunity to inform the business because you have more data going with the payment. So it only took a couple decades or so, but we’re finally at the point where it’s really starting to get interesting, I guess is what you’re saying.

Debopama Sen:

I think so. And nowhere is this probably more evident that in the world of cross-border payments, Yvette.

Yvette Bohanan:

Let’s step into that a little bit because when you’re talking about supply chain and all of that, you’re definitely in the cross border space, and that’s complex. There’s bilateral agreements. Historically, there was not a lot of visibility. Those Friday payments that you were talking about, the treasurers were making, they’d cross their fingers because if it was a new payment, especially to somewhere, when is it going to get there and how much is going to arrive? And all sorts of transparency things going on, particularly in places where there was less infrastructure. And now we’ve had Swift announce their connector, which is sort of the all singing, all dancing payments switch and hub. We have Project Nexus trying to solve cross-border payments that’s been going on for a few years. And with these fast payment systems, we see them piloting and actually regionally going cross border faster than ever to try to solve some of these problems. Do you have any sort of then and now example that you can cite of what it used to be like and what it’s like now from a cross-border lens, what you’re seeing customers able to do?

Debopama Sen:

I think there’s a huge amount of difference, and you alluded to it when you said that the Friday payments I was talking about that especially you were paying a new beneficiary in a new country, you’d probably cross your fingers and hope that it actually reached, and when it reached, it reached with the full value. Or at least there was some transparency as to what charges were applied along the way, because very often these payments are being made to small merchants who depend on that entire full value for their business models. So I think that’s a far cry from the situation today from what it used to be.

You mentioned Swift, and I really think that Swift GPI was a game changer, which was their tracking mechanism. And I think it’s a fascinating study, Yvette, on how shining a light on data on transparency then drives performance, right? And the way to think about it is that what Swift GPI really did, it brought transparency into every step of the payment. So all the banks that were participating or all the counterparties that were participating through the lifecycle of that payment, because it does take multiple parties to make these connections, we’re sharing information as to when the payment came in, when it left their institution, what charges were taken off. And that information was then available and visible to everybody in the chain.

And it took a while for that adoption to happen. But for example, we’ve been a big believer in the change that this could bring. But once that adoption happened, that transparency is today driving performance. So if you look at the latest stats, I think off the top of my head, I think 50% of payments that go through Swift GPI, which is a huge percentage of global gross product payments happen in less than 30 minutes. I think 40% happen in less than five minutes, and 100% happen in within 24 hours. That is a big change from what it used to be.

Yvette Bohanan:

A tremendous change. And you can actually, there’s some traceability with that too, right?

Debopama Sen:

Exactly. And you can trace where it is and you can trace who’s charged what, which I think is also very powerful because cost is a complaint on gross product payments and we know that as an industry and we need to keep pushing towards driving that.

The other big change is, and you touched on it as well when you talked about projects like Nexus, is that I think increasingly our regulators around the world is they have developed these very strong instant payment schemes are now, whether it’s in the UK, whether it’s in SEPA, whether it’s Pix or whether it’s the Asian ones we spoke about, because they have now so much data and visibility and comfort and they are all operating through banking systems where there is a level of KYC. Even wallets now require a level of KYC, and the wallets now have access to these schemes as well once they have KYCed their client.

So I think regulators are getting more and more comfortable in allowing cross-border payments transfers to connect to these instant payment domestic schemes, which wasn’t there before as well. So what that now does is that if you are able to access a local ACH scheme or a local instant payment scheme to send a cross-border payment into a beneficiary in a local market far away, you have instantly lowered your cost of payment and you also lowered any deductions that the beneficiary would be seeing. And that also is another enabler of commerce because the minute you are doing commerce online, you’re doing commerce through marketplaces, you’re dealing with smaller ticket sizes, and you cannot afford to have large amounts taken off that payment. So I think that the development of the domestic ecosystems combined with the transparency in the cross-border payments and the fact that now governments and regulators are getting comfortable in having them talk to each other, I think is also driving the next sort of fundamental shift in enabling commerce. That’s certainly what we are seeing from our standpoint.

Yvette Bohanan:

It’s happening. It’s been a long time in the making, but it’s happening, so that, it’s very exciting. We always tell people it’s very exciting time to be in payments. I think that’s the truth right now. There’s so much changing all at once, the regulatory landscape as well to accommodate all of this and to keep up with that is also pretty big.

The other thing that’s happening with all of this is the amount of time it takes for any company to go global has been rapidly diminishing and decreasing. It used to be some companies could never go global. They always operated domestically. Then it became, well, we’ll be global within five years. That was a lot of the e-commerce trend. Now with all of the technology available, people, very small organizations, they’re coming out global almost out of the gate. How is that changing things? Just sort of this idea of you have to be successful in so many countries that once, yes, fast payments are there, but there’s also just local payment methods to deal with as well. What is the impact of that on the treasury function?

Debopama Sen:

From our standpoint, this is certainly a trend we are seeing, Yvette, where as companies scale, and I think nowhere is it more marked or more present of scaling very, very fast through a centralized location is in the e-commerce space. So when you are trying to access millions of customers around the world, you want to go really, really fast. And sometimes the most efficient way is to do it centrally from hubs. Hubs in the US, hubs in Europe like the Netherlands, the island or Singapore or Hong, Kong. You create three or four hubs and then you access all the markets from there and you test your business models and you test the capability, whether it’s sellers or suppliers or consumers and intermediaries.

But at some point, we have seen many of our clients as they have started to see that, okay, these are the markets where our business model’s really working, this is where we have the largest opportunity, then they do need to localize. And when you really want to go deep in a local market, cards is often the easiest way to start because it has the widest global acceptance when you start accepting cards as payments for your goods or services. But if you want to go deep in a local market, you have to adopt, as you said, the local payment methods. You very often have to open local accounts. You don’t always have to do that. But very often, particularly in emerging markets, given the regulatory environment, you have to open local accounts.

You have to use multiple new counterparties who you may not have dealt with before to access those market, new intermediaries that adds a dimension of risk to your business model. And then you have to understand the risk or the risk reward trade off of the various payment methods in the market, which ones should we adopt? Which ones can we do later? But what will give me access to the largest set of customers, card penetration in many markets, particularly in emerging markets, is very low. But digital payment adoption is very, very high.

So once you have to start doing that for say, 10, 20, 30 markets even, because those are where you have large sort of commercial upside, then you’ve got to think again about everything else you’re talking about. So you are maintaining and managing accounts and counterparties presents risk, even the factor that now you have signatories on 30 different bank accounts around the world and you have to manage that, that is a task. That presents risk, it presents overhead. Then you’ve got to understand the settlement risk in some of these payment schemes. You’ve got to deal with small counterparties, your cash forecasting and your liquidity management in a location.

So very often we find that when we are helping our clients do this localization, whether it’s to pay suppliers locally through local payment methods or it’s to accept payments, we often have to bundle that with a cross-border real-time liquidity funding solution. So you need the local solution and you need the cross-border real-time funding liquidity management solution very often through APIs because otherwise the end-to-end business model will not work. Or it’ll become so expensive that it’ll not then become commercially viable for them in that market, or they won’t be competitive.

Yvette Bohanan:

I think that’s really the key. It’s people don’t understand that that technology, it’s not just the absolute cost of payment transaction processing, it’s the overall cost. And I think this is one area where we talk about fertile ground for an interesting conversation between payments teams and treasury teams. If the treasurers can actually help the payments teams understand what true total cost is in this scenario, that could be incredibly powerful to the business because what you’re talking about is not well known, and the payment professionals are very focused on the journey and the experience and the implementation and the protocol and standards and messaging and getting all of that. And then when they get the files and they’re starting into that settlement and money movement side of things, they kind of don’t go into that space intellectually or practically in terms of implementation. And if they can bridge that with the treasury team, they can sort of create magic on the P&L in a way, right?

Debopama Sen:

Absolutely. So magic on the P&L and magic on customer experience as well, because eventually a failed payment is going to have a very, very bad customer experience, and that failed payment could be because we just couldn’t get funding there in time to make that payment. So you’re absolutely spot on. And I think we are seeing this dialogue a lot more off late, but I think it’s still very early days yet, right? As a payments professional, we look at API specs and get very, very excited. That’s what excites us the most, right? Okay. And I have seven lines to code and I’m up and running, which is sort of lower. And as a treasury professional, I’m really concerned about what are my cutoff times in that market? Will I be able to fund in time? How many rejected payments will I have? And hence I’ve got to create refunds again all over a sudden.

So I think that dialogue is very important. I always think thought, Yvette, that a lot of it goes back to the first thing we need to do collectively is make sure that treasury professionals are at the table while payment professionals are designing their solutions for the customer and for the journey. I think both sides need to really understand the requirements and they need to be part of this journey together. It’s almost like co-creating, something we like to do with our clients a lot is co-creating the journey because then you can turn that into a competitive advantage if you co-create along with your treasury partner versus another company that your competitor who may not have done that and therefore will not have such a good experience or it’ll not be profitable growth. So I think that is very important. That is number one.

The number two thing is the data strategy, as I was alluding to earlier. What data do you want to capture at inception and what data can you make available through your treasury and finance systems for business use? And then how can you use that to run treasury more efficiently but also run business more efficiently? So I think these are two aspects. We are certainly seeing a lot more of that amongst our clients. I think the third thing that increasingly we are starting to see, and we are in a very interesting and unique position in a way, Yvette, because not only do we offer services across 137 currencies, but we are on the ground in 95 markets. So we have deep local expertise. So we’ve got these global clients who have local needs and we are able to marry them together.

The other interesting thing we are starting to see is as our clients now have to deal with the fragmented or a fairly different supply chain system as well, because now you’re dealing with logistics providers, you’re dealing with smaller suppliers who need a different type of support from a financing perspective. So one is managing your own funds, managing data, managing liquidity, and making that profitable. But now as a treasurer or a finance professional, you also need to support the business or your procurement teams with better supply chain solutions and supply chain funding solutions. And that I think is also another key enabler for business. So there are three or four areas that we are seeing a lot of change happening, which wasn’t probably a need a few years ago.

Yvette Bohanan:

So when you step back and think about it, what do you think treasury services will be doing to support corporate clients in the next three to five years? If you were putting your crystal ball on the table and you were making some predictions, what do you see happening and evolving in the financial institutions to help clients with all of this?

Debopama Sen:

So as you can imagine, I spend a lot of time thinking about this, and so do all of us in the industry. I think two or three areas where we are really as treasury service providers, treasury solutions providers are going to be very focused, I think one is getting really, really focused on client experience for our customers and for their end clients. So what do I mean by that? It could be something as simple as if you are now a corporate who has had to have bank accounts in 60 or 70 countries, can you at the click of a button change, you have a key signatory leave the organization, can you at the click of a button change your signatory in all these 60 countries across hundreds of bank accounts? I don’t think as institutions, we have focused on that in the past.

So today we’ve been investing in this for the last few years and we’re increasingly helping our clients become much more efficient, giving them a good client experience. And if they can do that, then they will give their end clients a very good experience. So client experience I think is the first pillar where I think we will see a lot more treasury services providers, banks and others really focus.

The second area is everything we talked about, which is really helping develop innovative payment solutions combined with innovative liquidity solutions. So funding and payments go together, and I spend a lot of time talking to my counterparts in the liquidity product team, and this is just, it’s an outcome of what we are seeing in the ecosystem. So innovative funding and payment solutions which enable commerce for them. So through APIs, through effective payment statuses, through effective reconciliation tools, through truly 24/7, 365, always on demand, high volume, high scalable kind of solutions. So that is a second bucket. And very often this is powered by partnerships.

We just, Citi just announced a cross-border payments partnership with Mastercard where we’ve linked our cross-border payments network, which is one of the largest in the world to Mastercard’s card network in about 14 countries, and we are going to keep adding to that. So it’s just an example of how we use partnerships very often to create these payment enabler solutions. So that’s the second pillar.

And the third pillar, which is very important, is risk management, which is two things. One is we are seeing a lot more heightened regulatory expectations on payment intermediation, fraud management, customer protection, consumer protection. So as solution providers, we have to embed all of those expectations into our solutions so that our customers can actually use these tools. And with the democratization of commerce and the globalization of commerce, there is always heightened financial crime risk. And so we are going to have to, as service providers embed controls into the system. You can’t rely on manual controls or you can’t rely on batch processes. So this is going to be a very critical third pillar. So client experience, innovative, embedded solutions across liquidity and payments and risk management to make that as a proactive enabler.

Yvette Bohanan:

I think that one of the things that we see, and you alluded to this a little bit when you were talking about partnerships and different companies coming up, there’s also a lot of fintechs out there, and you mentioned earlier open banking and things like that. There are lots of companies who are working to create solutions, and they’re always looking for good bank partners to help them. It is that co-collaboration again. It’s that helping each other do something better for the customer. And they’re trying just like a product team, they’re trying to connect in with the bank and talk to them about treasury services, but they don’t quite know who to go to or what to talk about. They just know what they need. So what advice do you have for companies who are looking for a bank partner in this space who are trying to innovate with you?

Debopama Sen:

This is such an evolving space. And that’s another thing I find so fascinating that in the area of payments, we serve fintechs, we serve some of the largest fintechs around the world. We partner with them and to go create as well. And in my experience, I think one is that if you are someone looking for a banking partner, you have to look at someone who can be almost like a trusted advisor because as you said, there are so many choices out there. The risk rewards are not always very clear, and you cannot go after every type of choice and every just payment methods being one type of choice that is out there. So you do need someone who has some experience and can be a trusted advisor. That’s number one.

I think the second one would be someone who’s investing in technology and is really focused on solving the business problem that you’re trying to solve and stay away from product pushing in a way. Really someone who can understand what is it that you’re trying to solve and co-create with you to solve that specific problem. And then someone who has a strong understanding of what are the risks and will tell you what the pitfalls are of certain options or certain areas or certain corridors or certain solutions. So I think that combination and that very balanced and transparent dialogue is very important.

Yvette Bohanan:

Have these partnerships and this emergent area working with fintechs and innovators in this space changed how you think about your systems and your approach and what you make available to them, say in development environments, sandbox environments, documentation, has all of that side of things changed as well?

Debopama Sen:

I would say it’s changing.

Yvette Bohanan:

It’s changing.

Debopama Sen:

It’s interesting you bring that up because we just at Money20/20 yesterday just launched a new and refreshed sort of Citi development portal. Clearly it’s an area of very strong focus because we recognize that how quickly our clients and partners can onboard onto us is very, very important as well, because speed matters and that ease of onboarding really matters. So in certain pockets, so for example, I talk about Citi here because it’s surreal to us as an example, is we’ve been offering access to instant payments in about 65 countries to our clients for a long time. But in the last three or four years, we realized that this in the past, we have built these capabilities by evolving our RTGS and ECH payments solutions. But we realized that a time for a step change was required and we launched an initiative called Citi Payments Express, which was completely cloud-native and a completely new and reimagined way where we redesign how we do instant payments with embedded controls, embedded screening, embedded monitoring.

And in the last couple of years that we have seen, and in our experience sitting down with our clients and actually co-creating that, we are talking about payments professionals getting really excited about API specs. We’ve actually had the ability to do that where we’ve sat down with them and we’ve built in their new requirements and new additions.

Now, it’s not possible to do that in every area of the product set. We took a bet on instant payments and information and data sharing because we felt that is ripe for disruption. And now we’ll move that on to cross-border payments as well. But there are a wide section of clients that we serve, both banks and corporates and public sector entities where they’re not ready to have that conversation with us. They’re in a position where they prefer and they’re comfortable to stick to sort of a canned set of capabilities and have that built into their system. So we as Citi need to serve the entire wide spectrum of clients, and many clients are moving across that spectrum, and we will be ready for them as they move across, but we’ve got to also be able to serve clients who are just getting started on their digital journey.

Yvette Bohanan:

That’s a great point. That’s a great point. It is a tall order. I don’t think people quite realize any financial institution’s responsibility and the need to serve such a breadth of clients, especially when you’re a startup and you’re saying, “Why do they have that? I don’t need it. I just need this,” and vice versa. “Why are they investing in that for these startups? I need this.” Right? So you have a lot of competing demands and perspectives to rationalize there.

We promised at the beginning of this conversation that we were going to give people some dinner party advice on how to get their conversations started. So if we think about, I’m going to lump payment professionals, fintechs kind of in one bucket talking with treasurers or treasury services folks and the treasury teams talking. If the conversation starter was something like, help me understand or tell me more about XYZ, what would the payment professionals be asking the treasury folks? And what would the treasury folks be asking the payment professionals? How do they get the conversation going?

Debopama Sen:

That’s such a wonderful way to think about it. My advice or input to the payments professional would be talk to your treasury partners about how they see funding solutions being available around the world. What are some of the challenges that arise because of 24/7 payments, for example? That would be a huge way to get the conversation started because it’s such an important phenomenon and it’s so relevant for payments professional and so relevant for treasury that talk to them about what are the challenges that it presents and what are the opportunities that it presents? And my advice to the treasury professionals would be start with a very simple question that what are your biggest payments challenges as you’re trying to grow your business or you are trying to compete with everybody else out there, and how can treasury help? I think you’ll be very surprised with how warmly that question will be met and the possibilities that might open up there.

Yvette Bohanan:

That’s fantastic. Debo, this has been a great conversation, but it’s that special time when we have to wrap things up. So I just want to thank you for joining us on this episode. I really, really appreciate it. I know you’re busy, you’re traveling. You’ve got a lot of irons in the fire globally, so we appreciate your time and sharing your thoughts with us and your experience. It’s been great.

Debopama Sen:

It’s my pleasure, Yvette. Thank you so much for speaking to me.

Yvette Bohanan:

And to all of you listening, thanks for joining. Until next time, keep up the good work. Bye for now. If you enjoy Payments on Fire, someone else might too. So please feel free to share this podcast on your favorite social media outlet. Payments on Fire is a production of Glenbrook Partners. Glenbrook is a leading global consulting and education firm to the payments industry. Learn more and connect with us by visiting our website at Glenbrook.com. All opinions expressed on our podcast are those of our hosts and guests. While companies featured or mentioned on our show may be clients of Glenbrook, Glenbrook receives no compensation for podcasts. No mention of any company or specific offering should be construed as an endorsement of that company’s products or services.