We are here as Money 2020 Europe in Amsterdam.
I'm Anastasia Kinski and I have the pleasure of being joined by Mark McNulty, Head of UK and EU Payments at Citi, and Will Artingstall, Head of Banking as a Service from Citi.
Mark, Will, thank you so much for joining me.
Very nice to be here.
So we've got a a lot to go through because I know the city is so busy across the board, um, with digital innovation.
Um, city services processes $6 trillion in payments every day across 180 countries.
Um, give us a quick version of what city services does and how your two roles fit together in it.
So city services is uh one of our core business lines, uh, and it enables our large corporation clients, uh, financial institution clients, governments, uh, and investors, uh, to move money, manage their liquidity, um, finance trade and administer securities globally.
Uh, we sit within the payments business, which is one of the core pillars of the services businesses.
So myself and Will are responsible for moving that 6 trillion.
Around the world on a daily basis, frictionless and in an ever increasingly 24/7, uh, real-time runner.
Big responsibility.
Um, it's a goal of yours, I think that, um, traditional hours are a thing of the past and you're sort of trying to leverage real-time rails, uh, whether it's instant or UK faster payments.
And what does the real-time economy actually look like for a city client in Europe today?
You know, just to, you know, maybe zoom out for a moment in terms of our overall global strategy within the payments business.
The key part of core element of our, of our strategy is to enable our clients to thrive in the digital economy, right?
And obviously the digital economy grows every single day.
And we do that by deploying and enabling them with real-time solutions enabling to transact both on a cross-border and a domestic basis on a 24/7 real-time basis.
Um, we, a great example of how we do that is our City Payment express instant, uh, platform, uh, which we launched in 2022.
Uh, is now live across 23 countries, uh, processing 10 million payments a day, which is, uh, in essence, 40% of our overall payment volumes that we process on a, on a, on a daily basis.
So you can see the rapid deployment of that platform across our network, and adoption by our clients.
Uh, within Europe and the UK we're live on that platform across 13.
Um, uh, countries, uh, we continue to roll it out, uh, into Central Europe and Poland over the next 12 months or so.
Um, and that coupled with our, uh, banking as a service, uh, capabilities is really the sort of enabler for our clients to thrive in this digital economy.
And um in that digital economy, the regulatory landscape is rapidly evolving, rapidly becoming more complex or more simple in some ways.
Um, in Europe we have PSD2, soon to be PSD 3, PSR, and what, how are you, how are you using that environment to innovate, um, and, and what does that mean for collaboration with clients?
Yeah, I don't know if there is a.
Anymore geography, uh, or geography at the moment that is more dynamic or perhaps complex from a regulatory environment than Europe.
Uh, it's certainly, it's certainly up there.
Um, but in terms of city, how do we approach it?
It's, it's in a number of ways, right?
To make sure that we can balance that regulatory appearance with, um, commercial innovation.
Uh, first and foremost, we're present in 90 countries.
We're present in 23 countries across the EU and the UK and in all those countries we're very much on the ground, right?
We have people on the ground, we're very much, um, uh, integrated into those countries.
Some of those countries were present for more than 100 years, right?
Um, so we have deep relationships in those countries, obviously with our clients, but also with the regulators, with the infrastructures and so on.
So.
First and foremost, being part of the discussion at a very early stage is absolutely key.
So we can be part of that shaping of how things are evolving, but also making sure that then we're taking that very early into our overall strategy and how things set that standard.
Exactly, exactly.
Um, secondly, uh, is our overall global operating model.
Uh, so we, you know, have a very verticalized.
Global operating model, which basically is enabling us to deliver very standard solutions locally, uh, in line with our clients' demands, right?
And we service clients across multiple countries, uh, where they want us to service them globally and therefore they want global standard solutions.
So our operating model is designed to enable us to do that at speed, uh, by a global operating model, but cater for the locals.
And then last Of course, AI, uh, as we think about navigating, uh, you know, deployment and enhancements, um, AI is obviously clearly a part of that.
Uh, we're already, uh, effectively using it in our development cycle.
Uh, and where we are, we're seeing benefits something like 30 to 40% increase in time to deployment where we're using AI and part of the overall requirements to development cycle.
So there's a number of factors in terms of making sure that we can balance our regulatory agenda, develop as we need to, and make sure that we find that sweet spot as well between regulatory adherence, but also the developments that our clients and the people.
Certainly an era of 3D chess when it comes to this strategy.
Well, if I maybe could add just a couple of points to what Mark has said, you know, the banking is a service business, does not operate without its customers.
If you think about the nature of what we really do.
We kind of enable that exact service offering that, that, um, the market is talking about.
So most of our major clients are the largest fintechs and e-commerce players, um, that are out there and the, the regulatory changes that we're seeing within PSD3 now are, are doing a few things for them, largely around sort of what would be requiring licensing.
So they're looking to us as a trusted advisor to help them navigate a lot of that complexity and a lot of that sort of, that sort of change.
Um, and it means a few things for us, right?
One, it means we need to think a little differently about how we offer products into that, that sort of client base.
We need to think a little bit about the standard to which we hold those clients, but we also have to help them navigate, um, a lot of that and that sort of body of work as well.
So I think our, the nature of our role, um, when we think about that, that regulatory shift is really what is changing and, and it sort of, it impacts everything front to back for us.
Um, but I think the, the really important message from, from my perspective thinking about this, um, from a banking as a service perspective is really just that we want to continue to enable those clients.
They are, and, and they are one of the, the fastest growing groups, um, within, within our payments business as well.
Um, so we do see them as a really critical part of the business.
And it's that approach that an understanding of how your role is changing, that, you know, it's so important for setting yourself apart.
And speaking of setting yourself apart and and a and a rapidly evolving landscape, your digital assets services, um, I know that you are um very active across the board.
Can you talk us through, um, some of the um strategies you've got around digital assets at City?
Sure, absolutely happy to do that.
The, the first thing I'd say is, and, and Mark had alluded to this in the start, we've been on a 24/7 journey for quite a long time.
We've been investing quite heavily in bringing our platforms up to the 24/7 standard for a while, and we have quite a few, um, pieces of technology today that are fully 24/7, right?
So a lot of our instant payment rails are 24/7.
Um, our card acquiring platforms tend to be 24/7.
Um, and we've also got solutions like our 24/7 clearing, uh, service today as well.
So, The first thing I would say is when the blockchain economy started really coming in and started pitching a 24/7 narrative, it fit really neatly into how we were already thinking about our overall payments business.
The second thing um was that we are, if you think about City at its core, especially the payments group, we are a network business.
Right, so today, we are basically a business that operates in 9 to 5 markets.
You know, able to make payouts in 135 currencies.
Um, you know, we have a very, very broad network today.
And so this really was a natural extension for us, and we thought about that in a couple of different ways.
So the first was really making that network available to the virtual asset service providers today.
So actually just bringing them to our network.
Um, obviously the, the, the changes and views around the regulatory shifts have made that a little easier to navigate.
The second was, we obviously thought about things like interoperability as a really natural starting point, and we've been doing a bit of that type of work already, right?
We have quite an extensive alternative payment network today.
So clients are able to make payments, for example, from a bank account, straight into a wallet, straight into a card.
A lot of those services are enabled through us already today.
So this felt like a very natural extension of the same type of thing.
Um, and then the third piece is really thinking about what the future states of a payments, uh, platform could look like.
So City Tokens Services as an example, is a very good foundation for how we, we sort of develop and enable those types of services.
So we really thought about this as a network, network extension, um, across those three worldlus.
It's just fascinating to see the way in which institutions are embracing this style of innovation and really shaping how then progress is made and innovation is made across finances.
Thank you so much, both of you, will Mark for joining us.
Um, I really hope you enjoyed the rest of Money 2020 and it's a successful conference for you.
Thanks for having us.
Thank you.
