Introduction of Taiwan Global Transaction Servicesyuang/2009_Spring/citibank/09 JUN NTU...To be the world’s leading provider of Cash Management, Trade, and Securities Services to

JUN, 2009Kathy Lin, GTS Taiwan Head

Strictly Private and Confidential

Introduction of Taiwan Global Transaction Services

Agenda

Global Transaction Services Overview

Experience Sharing for Transaction Banking Management

3

Global Transaction Services Overview

To be the world’s leading provider of Cash Management,Trade, and Securities Services to enable our clients to manage their treasury needs, and financial and commercialflows and assets.

Global Transaction Service (GTS) Mission Statement

Segment RegionalGlobal Cards North America

Consumer Banking EMEA

Institutional Clients Group (ICG) Latin AmericaSecurities and BankingTransaction Services Asia

Global Wealth Management

GTS’ Role in Citigroup

Citi is organized into four major segments –Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management

Products / Customer Group TTLC FI GSG CCB Total Customer Revenues

Global FXLM D E F G D + E + F + G

Loan Portfolio Management H I J K H + I + J + K

TTS - Cash L M N O L + M + N + O

TTS - Trade P Q R S P + Q + R + S

Securities and Fund Services T U V T + U + V

Total Product Revenues A + D + H + L + P

+ T B + E + I + M + Q

+ UC + F + J + N + R +

VG + K +O + S A + B + C + D + E + F + G + H + I + J + K + L

+ M + N + O + P + Q + R + S + T + U +V

GTS’ Role in Institutional Clients Group (ICG)

Total ICG Revenue

Customer Relationship Management

Product Developm

ent

The Business under GTS Coverage

Global Banking LCB

YTD 2003 revenuesNote: GTS present includes countries where GTS does not have physical presence but generates revenues

GTS PresentGTS Not Present

Latin America & Mexico

Asia-PacificNorth America EMEA

GTS Geographic FootprintGlobal Transaction Services services customers in over 100 countries

8

April, 2009

Citi First Quarter 2009 Financial Results

9

10

GTS Experience Sharing

• TTS PMDomestic Payment & CollectionX-border Solution & FinancingLiquidity Management/ Investment

• SFS PM

• TTS Sales

• SFS Sales

• Siebel CRM

• EB Team

• CitiDirect

• CitiService

• IVR

• CTI

• Corporate Portal

Platform

manpower

Client DeliveryClient DeliverySales ProcessSales ProcessProduct Development

Product Development

GTS Experience SharingGTS Organization

Value-added Solution Provider

Participation in commercial and financial Funds Flow Proactively

Innovation Success Transfer

Product Offerings to follow, Economic Evolution, Technology Transformation , and Market Deregulation.

Good growth not bad growth (both revenue and profit margin) in a sustainable way

GTS Experience SharingProduct Development Strategy

Current liability 30%

Net Worth

Non- Current Asset

Long-term liability

Fixed Asset

Current Asset

Account PayableAccount Receivables

Inventory

ST LiabilityCash & ST Investment

Working Capital Management

SuppliersBuyers

GTS Experience SharingValue-added Solution Provider

From Customers’ Perspective

Foreign CurrencyInward RemittanceCheck-to-SwiftCash LetterAccelerated Check CollectionUS West Coast LockboxExport Bills: end-to-endChina Capability LC Discount W/WORecourse

Foreign CurrencyInward RemittanceCheck-to-SwiftCash LetterAccelerated Check CollectionUS West Coast LockboxExport Bills: end-to-endChina Capability LC Discount W/WORecourse

Foreign CurrencyX-border Outward RemittancePRC RemittanceWorldLinkForeign worker remittanceImport Bills

Foreign CurrencyX-border Outward RemittancePRC RemittanceWorldLinkForeign worker remittanceImport Bills

Local CurrencyEFT – Outgoing: FEDI / IBRS Paylink Vendor/Check/ PayrollPaylink Dividend outsourcingCitiConnect Fund TransferCitiConnect SCMACH Payment

Local CurrencyEFT – Outgoing: FEDI / IBRS Paylink Vendor/Check/ PayrollPaylink Dividend outsourcingCitiConnect Fund TransferCitiConnect SCMACH Payment

Local CurrencyEFT – Incoming Virtual A/CCash CollectionSpeedCollect (Check & WLB)Integrated Mass Collection (Network-building)CitiConnect Payment GatewayACH Collectione-Billing

Local CurrencyEFT – Incoming Virtual A/CCash CollectionSpeedCollect (Check & WLB)Integrated Mass Collection (Network-building)CitiConnect Payment GatewayACH Collectione-Billing Liquidity Management

o ZBA /Pooling / Netting

Liquidity Managemento ZBA /Pooling / Netting

Virtual A/C

• Citibanking/CitiDirect • CitiBusinessDirect• Phone-banking• Corporate Portal

• Citibanking/CitiDirect • CitiBusinessDirect• Phone-banking• Corporate Portal







Suppliers

PoolsFlows

ABROAD

Shares

InsuranceCompany

BankAccounts

OtherInvest-ments

Individuals

ConsumptionPersonal Fixed Assets& Debt Payments

. Utility Bills

. Credit Cards

. Cash Expenses

. EFTs

. Mortgage

. Car

Savings

Dividends

PayLink

DividendTaxes

pensionssocialpayments

Paylink Custom Tax Payment

CollectionsSpeedCollect &

Wholesale Lockbox

Payments

PayLink

Compensation

IPOs

IPOs

Capita

l

ForeignWorkers

Customers

Company B

Government

Company A

CorporateBalances

Foreign workersBank A/Csat Home

AR Financing

Ins. Premium

Mass Collection

Network Building)

X-border payment for Foreign Workers

Remitter’s Relatives

in PRC

PRC Remittance

eBillingCitiC

onnectSCM

TradeX-border Transfer

ACH Payment

Citi

Con

nect

FT

Liqu

idity

Mgm

t

Supplier

Financing

Tax

ACH Collection

GTS Experience SharingParticipation in Cash Management Funds Flow - Taiwan







Product FeatureCorporate Card : Used for business-related travel and entertainment expensesPurchasing Card : Used for high-volume purchases such as office maintenance, repairs & suppliesOnline Reporting and Analytics Web base tool : support our client spending management and control

The First Real Visa/Master Corporate Card in Taiwan

[Section Title]

GTS Experience SharingInnovation Success Transfer : Commercial Card

The First Real Visa/Master Corporate Card in Taiwan

Taipei - Citi today announced its formal launch of Citibank ® Commercial Cards in Taiwan. The product is marketed as a genuine corporate credit card and will be issued to corporate clients in Taiwan.

Citibank ® Commercial Cards are the first genuine globally accepted corporate cards issued by both VISA and MasterCard in Taiwan. With the cards’ powerful global expense data management function, the cards will offer world-class business payment services to Taiwanese companies to help strengthen their financial operations and enhance their international competitiveness.

Citibank ® Commercial Cards are different from other individual business credit cards available on the market and have been issued to more than 3,000 companies in 45 nations and is accepted worldwide.

In addition, the cards’ world-famous global business payment and data integration functions provided by Citibank’s end-to-end platform makes expense management more transparent and smarter, while eliminating inefficient paperwork.

GTS Experience SharingInnovation Success Transfer : Commercial Card







International Trade Defined

“International Trade” is the movement of goods and services that develop from a business transaction between a buyer in one country and a seller in another country

Facilitating cross border trade is one of the most important and traditional roles of the bank

Issues Associated with Trade Risk

Identify riskCommercial riskForeign exchange riskCountry riskOther risks

Measure exposure

Understand options available to mitigate risk

Commercial Risk

RIS

K O

F N

ON

PA

YM

EN

T

RISK

OF N

ON

DE

LIV

ER

Y

OPEN OPEN ACCOUNTACCOUNT

DOCUMENTARY DOCUMENTARY COLLECTIONCOLLECTION

LETTER OF CREDITLETTER OF CREDIT

CASH IN ADVANCECASH IN ADVANCE

EXPORTER RISK IMPORTER RISK

HIGH LOW

SELLER

BENEFICIARY

BUYER

APPLICANT ISSUING BANK

ADVISING /

Negotiating BANK

2. Apply for L/C

4. L/C sent to Advising

Bank

3. Credit Check

Letter of Credit

5. Advise L/C

7. Documents & Draft*

8. Payment

6. Ship GoodsCustoms

10. Payment

9. Documents and Draft

11. Payment or Accepted Draft

12. Documents

13. Docs.14. Release Goods

1. Order

Letter of Credit

Advantages

• Elimination of Importer credit risk – Issuing bank assumes it

• Elimination of country risk if confirmed

• Elimination of foreign exchange risk if issued in exporter's currency

• Payment float is minimized

Disadvantages

• Expensive

• Non compliance with terms of letter of credit

Advantages

• Importer pays after shipment

• Payment is made only after exporter’s compliance with terms of letter of credit

Disadvantages

• Expensive

• Goods may not be as represented in documentation

To Importer

To Exporter

Commercial Risk

RIS

K O

F N

ON

PA

YMEN

T

RISK

OF N

ON

DELIVER

Y

OPEN OPEN ACCOUNTACCOUNT

DOCUMENTARY DOCUMENTARY COLLECTIONCOLLECTION

LETTER OF LETTER OF CREDITCREDIT

CASH IN ADVANCECASH IN ADVANCE

EXPORTER RISK IMPORTER RISK

HIGH LOW

End Buyer Taiwan Manufacturer in

China

Taiwanese & Chinese

Suppliers

Taiwan Manufacturer HQ in Taiwan, BVI,

Cayman, etc.

BuyingOffice (HK)

Chinese Suppliers

Inter-company

Supplier’s Office in HK

(a)

(b)

Citiconnect

Inter-company

Greater China Funds Flow

GTS Experience SharingEconomic Evolution

Taiwan IT Co.


Buyer 1

Buyer 2

Buyer 3

Seller

1. PO

5. Payment @ maturity

4. Advance Fund

2. Goods / Invoice

6. Settlement

3b. Notification

3a. A/R


Account Receivable Purchase Flow

Recourse LevelNone/ Limited/ Full

Buyers credit risk

Supplier performance risk

Advance RateMultiple of Historic Dilutions

Based on Due Diligence

Prefer Advance Rate to Over-Collateralization

Cash DominionAssigned/ Controlled/ Bank Owned

Supplier Credit Risk

Servicing

# of Buyers and Dispersion of A/R Prefer Bank Owned/ Controlled

Perfection/ DisclosureNotified / Non-Notified

Legal opinions from different jurisdictions

Prefer Notified

Key Structuring Elements of Account Receivable Purchase Program


Global Trade Solutions

FinancingFinancingAdvances under LCsDiscount Bills / Notes

Receivables / Payables/Purchase Financing Pre-export Finance

Supplier / Distributor Finance

Advances under LCsDiscount Bills / Notes

Receivables / Payables/Purchase Financing Pre-export Finance

Supplier / Distributor Finance

InformationInformationPayments Tracking

Automated Status ReportingReal-time data retrieval for

local and global subsidiariesCustomized Reporting

World-class Customer Service

Payments TrackingAutomated Status ReportingReal-time data retrieval for

local and global subsidiariesCustomized Reporting

World-class Customer Service

SettlementSettlementDocumentary Collections

Letters of CreditOpen Account Trade Processing

Documentary CollectionsLetters of Credit

Open Account Trade Processing

Risk MitigationRisk MitigationLetters of Credit

Letters of Credit ConfirmationsPolitical / Commercial Risk Insurance

Standby Letters of Credit

Letters of CreditLetters of Credit Confirmations

Political / Commercial Risk InsuranceStandby Letters of Credit

CUSTOMER







CitibankNetworks

ATMsATMs

Post Office Counter Post Office Counter / Direct Debit/ Direct Debit

CustomerCustomer

Local BankLocal BankIBRS / ACHIBRS / ACH

WLB

PayerPayer

Convenience StoresConvenience Stores

ConsolidatedPayment Info..

Open Invoice FileOpen Invoice File

ChecksChecks

Collection Channels

GTS Experience SharingTechnology Transformation: Integrated Mass Collection Service







TransactionProcessing

4

AssetAccumulation

1AssetManagement

2

TransactionExecution

3

Fiduciaryand InvestorServices

7

Investment Industry Value Chain

InvestmentAccounting

5

Performance Measurement

6

SFS focus on the transaction processing & portfolio administration stages of the clients investment value chain

Fund managers Brokers

Custodians Custodians Custodians Trustee/ others

Pensions, Mutual funds

GTS Experience SharingSecurities & Funds Services

Definition of “Custody” or “Global Custody”

First developed with the passage of the Employee Retirement Security Act of 1974 in the US => fund managers were required to segregate client assets from own assets.

In the 90’s, the industry experienced substantial growth. Custodians also spent big money to boost their technology and efficiency.

What started off as a complementary service has become a global scale business.

WHAT CUSTODY AIMS TO PROVIDE?

Safekeeping and protection of financial assetsFacilitating the trading of such assets

Tracking the values of portfolios

GTS Experience SharingSecurities & Fund Services

Division of professional specialties

Cross border investment activities

Regulatory requirement


What Services Do Custodians Provide?

Transaction ProcessingSettlementCash ManagementForeign ExchangeSafekeepingReportingCorporate ActionsSecurities LendingTax Reclamation

Investment AccountingNet asset valuationsProfit/ LossStatement – management and regulatory Multi-currency accountingCompliance monitoring

Why Needs A Custodian?

Service Model - Direct Custody

CLIENT

CitibankCanada

CitibankSingapore

CitibankFrance

CitibankMalaysia

CitibankHong Kong

CitibankItaly

CitibankUK

CitibankUSA


Service Model – Global Custody Single Window Operations

AgentBank #1

Excellent ExecutionHighest industry STP rates through proprietary network

Internet delivery/data warehouse

Fast inquiry resolution through global tracking system

Global ConsistencyLargest global reach

Citigroup brandDriving to a consistent customer experience

Implementing our global system set

Local Market ExpertiseRecognized industry expertise, 50 global markets

Early notification of market issuesTimely market news delivery to InvestorsAccess to and influence with regulators

CompetitorGlobal Hub

Customer

AgentBank #1Agent

Bank #1AgentBank #1Agent

Banks

AgentBank #1Agent


Bank #1

Competitor Model

AgentBanks

AgentBank #1

CitibankGlobal Hub

Customer

CitibankCitibank

CitibankCitibank

Citibank

Citibank

Citibank

Citibank Model

CitibankCitibank

AgentBank #1

Excellent ExecutionHighest industry STP rates through proprietary network

Internet delivery/data warehouse

Fast inquiry resolution through global tracking system







Local Market ExpertiseRecognized industry expertise, 50 global markets

Early notification of market issuesTimely market news delivery to InvestorsAccess to and influence with regulators

CompetitorGlobal Hub

Customer

AgentBank #1Agent


Banks

AgentBank #1Agent


Bank #1

Competitor Model

AgentBanks

AgentBank #1

CitibankGlobal Hub

Customer

CitibankCitibank

CitibankCitibank

Citibank

Citibank

Citibank

Citibank Model

CitibankCitibank


• TTS PMDomestic Payment & CollectionX-border Solution & FinancingLiquidity Management/ Investment

• SFS PM

• TTS Sales

• SFS Sales

• Siebel CRM

• EB Team

• CitiDirect

• CitiService

• IVR

• CTI

• Corporate Portal

Platform

manpower

Client DeliveryClient DeliverySales ProcessSales ProcessProduct Development

Product Development

GTS Experience SharingGTS Organization

Implement a world leading web-based Customer Relationship Management system developed by Siebel to track sales performance

Define individual sales goal to ensure that all sales goals surpass the country product revenue

Set benchmark for # of customer calls per week per sales

Publish “top 10 deals win and loss” to increase peer competition and drive sales momentum

Launch selling campaign to accelerate revenue materialization

GTS Experience SharingRobust Sales Process

GTS Experience SharingRobust Sales Process: Siebel CRM System

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Pla

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plan

tatio

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ISFi

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ipel

ine

Sales Cycle Proability % Comment01 Target Prospect 0-10% Very early days. Maintain a low prob.

02 Needs Analysis 10-40% Prob could be as high as 40% if we have the relationship, industry contacts, customer contacts, product suite etc

03 Solution Fit / Deal Review 20-45%We are assessing our ability to match the customers key requirements with our product, operational and country capability. We could at this stage obtain an increased probability on this basis

04 Deal Review Complete / Proposal Sent 30-50% A proposal 'out there' with a sound basis of customer needs analysis could put us in a situation to have as much as a 50% chance

05 Negotiation Up to 80%

By negotiations, the customer now has several providers responses and there could be negative assessment to deal with OR position of strength to capitalise. This status could have quite a discrepancy in prob. HOWEVER, since the customer is clearly fulfilling a tender for business it is likely that the prob will either be LOW or HIGH with little middle ground

06 Finalisation / Decision Up to 80%

Generally as per 05 albeit that there might be less customer dialogue. It is a chance however to increase probability by using the banking relationship to 'influence' the decision. Again the probability should be polemic - either high or low

07 Implementation Pending 100%

08 Active Implementation100%

During this stage deal products may be decommited by the customer. These deal products should be marked with a status of 'Decommitted' and the probability set to 0%

09 Implementation Complete 100%10 Deal Lost 0%11 Prospect which did not materialise 0%

12All other deals 3-6 marked for deletion due to error / duplication etc

0%

GTS Experience SharingRobust Sales Process: Sales Cycles

CitiDirect® Online Banking deliver international corporate and financial institutions the most secure, efficient and real time banking services

CitiDirect® Online Banking were presented as World Best Internet Bank and World’s Best Corporate Institutional Bank from Global Finance

GTS Experience SharingClient Delivery - Channel

Total Transaction Value in USD

Total Transaction Volume

Total Active Users

Corporations Use

Currencies

Countries

Languages

Countries in Asia

Platform

$9,777,778,586,800

35,119,520

305,533

80,620

100+

90

23

18

1

CitiDirect ® Online Banking Today

Internet AdvantageAccess Account Information at everywhere and any timeReal-time Account Information

Enhanced Internal Operation Efficiency Easy to monitor transaction process and statusRemove Cross boarder/region barrios

Simple System Installation and Automatic UpdateDownload and install directly from websiteSystem Automatic Update

Safest Internet BankingUtilize Safeword Card for login controlFlexible authorization matrix up to 9 x 9 authorizers

Why CitiDirect ?

Centralized Payment

Service

Global operating solution

Taiwan Head office conduct all payment service for all the overseas entities

Those overseases entities can make inquiry for the account statements

Implementation manager provide tech support to the ERP Integration and encrypted data processing

Major clients include Acer group, BenQ, Eva Airline, China Airline,Yang Ming Marine.


China, Hong Kong entities perform local data entry and verification

Taiwan Head office conduct Payment authorization and Releasing

Implementation manager provide tech support to the ERP integration and encrypted data processing

Major clients include Hon Hai (321 accounts), Lite-On (186 a/c), Formosa Group (70 a/c)…

Centralized

Authorization

Releasing

Data Entry &

Level 1 authorization

Data Entry &

Verification

Data Entry &

Verification

Data Entry

Great China Solution

Library

Maintenance


Was established In 1997

Provide One Single Contact Window & Right Answers Right Away

Expedite The Resolution To Meet/Exceed Customer’s Expectation

Inquiry about :Product InformationAccount ServicesTransaction Follow UpInvestigation On RequestsBank Practices & Regulations

Product Coverage :Fund TransferAccount InformationPaylink Check/PayrollSpeed CollectImport/ExportForeign ExchangeLoanTime DepositElectronic Banking/Internet BankingOthers …………...

As of 2007, CitiService inquiry scope covers 51 products about 800 events

GTS Experience SharingCustomer Services

Monitor

headphone

A mirror to remind the CSO to keep smiling

To provide customers with the most swift services, every CSO has 2 PCs and a 21” CRT monitor

GTS Experience SharingCustomer Services

Investment in Systems/Infrastructure- CTI (Computer Telephony Integration) System- Exceller Systerm --- Customer Inquiry Data Management- Advanced IVR (Interactive Voice Response) System

Investment in Manpower Resources & Training- Improve service with investment on sufficient and qualified manpower- 3-month pre-job training and CSO qualification certification- Provide weekly 2-hour training

Service Quality Certification

- Acquired ISO9001:2000 certificate in 2001 and became the first financial institution call center with ISO certification in Taiwan.

GTS Experience SharingInvestment On Customer Service

CTI (Computer Telephony Integration)

012345ABC Taiwan Co. Ltd PLATINUM

ENGLISH

Auto-pop of Customer

Name/Account#./base#

Information

Auto-pop of Customer’s InquiryHistory / Contact Person/Contact Tel.

Choosing language

If Pin Verification Ok(green color), it would show account/base# & customer name.

Telephone Functions Are:Answer/Transfer/Dial to IVR…..

Auto-pop of Base No & Pin Verification Status

Last 5 inquiry items in IVR for this customer.

ABC Taiwan Co. Ltd

012345

*MS.Chen

012345

Log System for Customer’s Inquiry/Request.

Thru this System, CSR can pass the cases to operation for further investigation.

Customer’s Profile Maintenance.

Customer’s Inquiry Track System. Including: 51 products/799 events.

Customer’s Inquiry History Maintenance.

Analysis Report Generation:

Showing Customer’s Behavior.Providing the Special Service according to Customer’s behavior.Reviewing Internal Process for Improvement.

Customer’s Profile

Records for Customer’s Each Inquiry

EXCELLER System

72 Service Lines - Provide quick and easy access to our 24-hour phone inquiry service

High Customer Information Security - After selecting system language, customers have to input account / base number and pin number for identification; then system will transfer the call to designated Customer Service Officer.

Provide Useful Inquiry/Fax Functions :* Account Statement Inquiry * Indicative Exchange Rate * Account Statement Fax* Incoming/Outgoing Remittance Advice Fax * Cash/ Trade Form Fax (16 Items)

Advanced IVR (Interactive Voice Response) System







Revenue Growth

Market Share Increase

Active Customers Growth

Revenue GrowthRevenue Growth

Market Share IncreaseMarket Share Increase

Active Customers GrowthActive Customers Growth

GTS Experience Sharing

Robust Sales Process

Product Innovation

Customer Satisfaction

GTS GTS FundamentalFundamental

Q & A