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And The Role Of The Treasury Professional In The New World Order
The Rise Of Machines
June 11, 2014
Treasury and Trade Solutions
2
People And Machines Are Now Partners In Doing Work
• Machines (specifically computers) have significantly changed how we work
• This is especially true in financial services
• We now live in a world where computers and people work together to get a job done
• Computers are especially good at mundane repetitive tasks
• Which leaves financial professionals in a better position to handle strategic tasks
3
100 Years Ago – Without Modern Technology
Household Appliances
Health
Cars
Telecom
In 1930 a popular women’s magazine asked readers how many time they wished they could push a button and have all their household chores performed for them. This was decades before modern conveniences like dishwashers and microwaves were on the horizon.
At the turn of the last century, indoor plumbing was not common. Raw sewage was often dumped directly into streets and open gutters which went straight into rivers and lakes, many of which were sources of drinking water. Waterborne diseases were the 3rd leading cause of death.
Source: Greatest Engineering Achievements of the 20th Century National Academy of Engineering http://www.greatachievements.org
In 1904 a grand total of 141 miles of paved roads outside cities. The first crossing of the continent by car in 1903 required 44 days of hard driving.
Telephones were initially sold in pairs. The first customer, a Boston banker, leased a pair for his office and home, plus a private line to join them.
4
Payments Have Also Become Tied To Technology
BARTER
In the earliest days, men would trade
their goods directly, without a currency as an intermediary
GOLD & SILVER COIN
(500 BC)
The first coins were created in Lydia and allowed a
single standard to value items and facilitate trade.
PAPER CURRENCY
(1000)
The use of paper money was first
used in china as a substitute for
coinage – allowing for easier transfer
of funds.
WIRE TRANSFER
(1871)
Western Union introduced its
money transfer service, based on
its extensive telegraph network
PAPER CHECKS
(1650)
In Britain goldsmiths and
scriveners created checks to allow for easier trade over
distances.
SWIFT(1973)
SWIFT creates a shared worldwide
communications link and common language for
financial transactions
CITIDIRECT®(2000)
Citi creates the first online web based
platform for performing global
institutional payments
ISO 20022 (2004)
The ISO 20022 standard was
adopted, creating a standard
international language for
payments communication
2000 AD1500 AD1000 AD500 AD0500 BCE
Physical Electronic Computerized
Treasury and Trade Solutions (TTS) Is The World’s Largest B2B BankCiti’s Treasury and Trade Solutions (TTS) provides the world’s largest institutions solutions to manage their cash, finance trade and make payments globally
E-banking in 24 languages around the world
Operate in 100 countries worldwide with domestic payments
in 140
Banking services for 45 of the top 50 FT Emerging 500
Serve 81% of the Fortune Global
500, 400+ of the top 500 banks, and
700+ public sector organizations
Connected to 154 cash clearing
systems globally
5
6
There Are Two General Ways To Make Payments
Mobile
Citi ChannelServices
CitiDirect BE OnlineCitiConnect
File
Machine To Machine Online Banking
Citi's electronic banking platform in online, mobile and tablet versions for anytime/everywhere access
Provides a direct, connection to Citi from a company’s ERP (Enterprise Resource Planning) system and treasury workstation
Tablet
Computers Can Directly Integrate And Make Payments
ConnectivitySecurity
EnrichmentTransformationMulti-Destination-Routing
MonitoringReconciliation
Support of industry standards for communications and custom formats
Unparalleled global reach with TTS capabilities covered worldwide
CitiConnect
Cash and Trade
Single Connectivity Window to Citi’s Cash, Trade, and Card products
Commercial Cards
Issuer Services
Investor Services
Statements and Reporting
eBAM
Citi’s Treasury and Trade Solutions (TTS) provides the world’s largest institutions solutions to manage their cash, finance trade and make payments globally
7
Computers Can Also Reconcile Payments
Citi Statements and Reconciliation is a solution designed to facilitate your financial and operational reconciliation through providing data enrichment and itemization
The solution will help increase the efficiency of your account reconciliation processes and move your back office capabilities beyond straight through processing to straight through reconciliation
The solution provides itemization of bulk payments and data enrichment of your transactions. The solution is designed to enhance end of day statements generated from the CitiDirect BESM platform
Statements and Reconciliation allows clients to automate much of reconciliation, reducing manual efforts involved
8
9
What Do We Need People For?
Mobile
Citi ChannelServices
CitiDirect BE OnlineCitiConnect
File
Machine To Machine Online Banking
Citi's electronic banking platform in online, mobile and tablet versions for anytime/everywhere access
Tablet
Provides a direct, connection to Citi from a company’s ERP (Enterprise Resource Planning) system and treasury workstation
10
Computers + People – A Powerful Combination
• In 1997 the IBM computer Deep Blue beat the world chess champion Garry Kasparov. This was the first time that the best computer in the world beat the best human in the world
• Was this the end of human / computer chess?
• Playchess.com held a “Freestyle” competition in 2005 – changing the game
– Humans and computers could partner– The chess machine called Hydra – the “grandson” Blue
played– A Grandmaster with relatively good computer could
easily beat Hydra – But there was a surprise winner…
• The winner was 2 OK players with 3 laptop computers – but this system of players, computers and the interface worked better than the competitors
• This is an example of Man Computer Symbiosis a term coined by JCR Licklider in 1960
Source: “The Chess Master and the Computer” by Garry Kasparov, New York Review of Books, February 11, 2010
11
Humans And Computers Are Partners
Human Computer
Man Computer Symbiosis(Humans + Computers)
●Selling Services
●Managing Audits
●Dealing with Crises
●Connecting to other machines:to efficiently transport data (e.g., CitiConnect ®)
●Process/Match large amounts of routine data: – looking for exceptions (e.g., Straight Through Reconciliation)
Category Human Machine
Cost Cheaper and more flexible
Build a better UI allowing humans to do their job
Strategy Set and measure goals Analytics capabilities
Judgment Personal accountability Provide appropriate controls
Improvements Analyze trends to increase efficiencies
Provide data to allow humans to improve performance
12
Man Machine Symbiosis – Automobile Example
• Today, cars are very closely linked to people during the driving experience– Cars today are “Drive by Wire”– GM issued its recall because when the car
turns off, people could no longer drive –there was no power steering, no power braking and airbags shut off
• But humans are still needed for a number of things:– Cost: Advanced computer features (self
parking, accidence avoidance) are still very expensive today
– Strategy: People still need to decide where to go (for now)
– Judgment: People are still needed to be responsible in case there are accidents – in case something truly exceptional happens
– Improvements: Car designers are continuing to advance the system
13
Cost: Cheaper And More Flexible
• Key learning: Make simple tasks simple to perform
• Home Screen: The CitiDirect BE platform provides a home screen view that will allow clients to perform all of their functions more quickly and easily
• Shortcuts: Customizable shortcuts provide one click access to most used functions
• Quick Tasks: Allow users to easily authorize and release payments and do other common tasks
Human Computer
• Humans are more flexible and multipurpose
• Getting a human up to speed is much easier than programming a machine
• Provide access to the electronic system
• Allow humans to get their jobs done quickly and easily through an optimal User Interface (UI)
14
Strategy: Set And Measure Goals
• Market Data: Provide broad information to make strategic decisions
• Deep Analytics: Allow managers to make analytical and intuitive decisions on money management
• Set Liquidity Positions: Interactive viewing, analytics and reporting capabilities over their structured accounts
Human Computer
• Setting cash management strategy
• Setting standards on connectivity options
• Understand market trends and other experience to make business decisions
• Provide access to key market data and analytics
• Provide capabilities to analyze data
15
Judgment: Personal Accountability
• CitiDirect BE Mobile: Allows senior client users to authorize payments even when they are not in the office
• Maker / Checker: To improve control, there should always be a separation between a person inputting a payment and authorization
• Customizable Authentication: Different types of transactions require different levels of risk (and therefore authentication). The CitiDirect BE platform offers 9 levels of customized authentication
Human Computer
• The ultimate arbiter of controls and authentication
• Provide accountability for high value transactions
• Provide data that allows for simple and easy understanding of risks
• Flexible infrastructure to manage security and controls that companies need
16
Improvements: Analyze Trends To Increase Efficiencies
• Payments Analytics: Identify trend and opportunities to improve straight through processing
• Receivables Analytics: Streamline receivables reconciliation through consolidated transactional information.
• Scorecards: Provide summarized information to measure progress against goals
Human Computer
• Manage exceptions and manually process them
• Analyze data and make system improvements
• Capturing large amounts of data and storing and transforming it for analysis to improve system performance
• Highlighting exceptions
17
Conclusion: Computers + Humans Beats Either One Alone
1. Machines have made a large impact on how we live today across every industry including finance
2. Computers are good at some areas:• Connecting to other machines:
to efficiently transport data (e.g., CitiConnect)
• Process/Match large amounts of routine data: – looking for exceptions (e.g., Statements and Reconciliation)
3. But people still have a place through advantages in:
• Cost: Cheaper and more flexible • Strategy: Set and measure goals • Judgment: Personal accountability • Improvements: Analyze trends to
increase efficiencies
My Son’s First Try At Human Computer Interaction
Man Computer Symbiosis
19Presentation Type (optional) | Date of Presentation
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