Celebrating 10 Years of our Citi Innovation Labs
By Gulru Atak, Global Head of Innovation, Treasury and Trade Solutions June 10, 2019 10:15 AM
The promise of technology’s capacity to re-define our clients’ and customers’ experiences and expectations has long been a catalyst for innovation at Citi. In 1975, the advent of ATMs prompted us to establish a research center to explore consumer behavior and interactions with these new machines. Fast forward to 2009, and Citi’s Treasury and Trade Solutions (TTS) opened the firm’s first Innovation Lab in Dublin to help us better anticipate how advancing technology would impact our clients’ expectations, business models and treasury operations. This year, the 10th Anniversary of the founding of our expanded Global Innovation Lab Network, is a good time to reflect on the progress we’ve made since we established our first Lab, and to think about the implications of both present and future trends that continue to inspire and motivate us.
The Evolution of an Idea
Ten years ago, TTS leadership decided that to be most effective, the Innovation Labs would have to operate independently from the business – not only to provide a safe and contained environment for experimentation, but also to enable the Labs to focus on long-term consumer and technology trends and to experiment with a variety of solutions based on the range of insights derived from interactions with clients. As Treasury and Trade Solutions evolved, the Innovation Labs’ relationship to the business evolved along with it. TTS Global Head Naveed Sultan made the decision to put innovation at the center of everything TTS does. A closer alignment and integration between the business and the Labs was the result.
Understanding the implications of disruptive technologies and innovating in a timely manner to those changes has become integral to TTS’ approach in keeping pace with and even anticipating evolving client needs. The Labs now function as change agents by making innovation top of mind for everyone at TTS. The required alignment of innovative thinking and client needs was accomplished by setting up a two-way channel between the Labs and the business to exchange ideas and collaborate on solutions. Now, we routinely run employee programs focused on cutting-edge topics including design thinking, disruptive technologies and the best ways to co-create with clients. We’ve also established an internal Innovation Portal through which employees can share their latest work and insights about innovation with other teams within TTS.
Our current goal is to identify the ways in which business models may change over the course of the next three to five years, primarily due to shifting demographics, the evolution of client activities and models, and technological developments. By building client Points Of View (POVs), developing Proofs Of Concept (POCs) and continuously validating ideas with clients, our teams in the Labs are working closely with the business to take full advantage of new opportunities as – or even before – they are adopted by clients.
How Clients Have Changed
Now more than ever, TTS clients are looking to set up their own innovation activities, reflecting just how much the corporate world’s attitude towards technology has changed in recent years. Within our own corporate clients’ treasury teams, this shift – and the underlying factors motivating it – has been quite dramatic. The expansion of client companies into multiple markets, and the consequent need to work with different currencies and payment and collection tools, often under different jurisdictions, has increased the complexity of treasury’s operational role within many organizations. Entirely new business models based on burgeoning e-commerce, connected ecosystems and real-time dynamics have only compounded this ongoing challenge. Moreover, changing demographics, combined with the entrance of digital-native and media-savvy generations into the workforce, is shaking up the treasury function and expectations of how transaction banking should work.
All of these developments, taken together, have combined to produce more dynamic, innovative and tech-friendly corporations and treasury functions. At one time, some clients were hesitant to fully embrace CitiDirect BE® Mobile. Today, the majority of TTS clients increasingly rely on mobile banking for their corporate accounts, just as consumers have for their personal accounts.
Because digital disruption will continue to manifest itself in a variety of ways and on multiple fronts, industry experts estimate that by 2022, there will be 29 billion connected devices in the world with the potential to transform industries from agriculture to manufacturing. Ongoing innovations and evolving technologies including APIs and AI (Artificial Intelligence) are likely to result in disintermediation or new intermediation across industries. Companies will need to develop and leverage new mindsets and capabilities to succeed in this rapidly-changing environment.
At TTS, we have all the right people, many decades of client relationships, and a unique global network that brings constant value to our partners and clients to win big in this new era. Ten years after the first Innovation Lab was established, its creative mindset implores and inspires all of us to remain curious, explore the future and be passionate about meeting client needs.
Listening, Learning… and Innovating
The Innovation Labs’ engagement with clients revolves around educating them about the promise of emerging technologies, while also ensuring that at Citi, we are addressing the unique problems they face. This approach has worked well as a way of adapting what we do every day to clients’ rapidly accelerating expectations of the power of technology. Clients that have successfully engaged with the Labs are more comfortable talking with us about their everyday challenges. The Labs, which host over 100 clients a year, can respond by putting their co-creation methodologies into action.
Co-creation is about engaging with individual users across a wide range of relevant company functions. Innovation Lab experts listen closely to clients about the everyday challenges they face, gain an in-depth understanding of these challenges and in turn create solutions clients may not even know they need, but which prove to be invaluable. This approach has spurred myriad ground-breaking solutions – from Citi’s AI-powered chat bot in our CitiDirect BE® platform to Citi® Payment Outlier Detection using machine learning – benefitting every company that works with Citi regardless of whether they participate in the co-creation process.
Partnering for the Future
Our thinking also extends beyond the Labs. We understand the importance of collaborating across a broad ecosystem that includes not only clients and employees, but also academia, industry bodies, and, of course, fintechs.
A bank’s value is often defined by its scale and connectivity, whereas the value proposition of fintechs is based on their entrepreneurial and technological capacities. We can complement one another through partnership. As Naveed Sultan recently said at Mobile World Congress, “by recognizing the strength of each partner – and being humble enough to accept you are not the best at everything – it is possible to build a partnership that delivers the best possible solutions for clients.”
Why Our Labs Are Still Special
Although other companies have followed suit in creating similar innovation solutions, our global network of Citi Innovation Labs still stands out as unique in our industry. First and foremost, our people bring a wide range of diverse backgrounds to the table. Many if not most come into the Labs with no banking experience; some may have launched start-ups that thrived or start-ups that failed; some have worked on messaging in space, while still others worked at the CERN Institute for nuclear research.
Not despite but because of this diversity of background and experiences, after they start working closely with the banking experts at TTS, they create synergies that help guide TTS’s future. The Labs have also helped drive notable progress in transforming the TTS culture. Is innovation yet mainstream at TTS? We can’t quite say that. But what we are seeing is design principles being applied to key initiatives. And we continuously validate our solutions with clients and fully embrace “failures” that ultimately drive our thinking in new directions. After a decade of the Labs’ helping to embed a culture of innovation, exploration and experimentation across TTS, our clients’ ever-evolving objectives and priorities are what inspire us to redefine the future of transaction banking. As we enter our second decade of building innovation into our culture and our business, at TTS we’re confident in our ability to keep creating innovative and impactful solutions for years to come.