Citi pushes to make digital money concept a reality

Eradicating cash and moving to digital has been a long-standing goal in the financial services industry. Although many are sold on the benefits of digital money over cash – including the increased security, transparency and cost savings – there is still a long way to go on the global journey of converting physical money into digital money.

The benefits of digital money include introducing 220 million people into the formal financial sector; bringing $1000bn of new flows into the formal economy, and an estimated $120bn in increased tax collections, on a global basis, according to research by Citi. And when it comes to savings, Citi estimates that the retail sector – on a global basis – can save $120bn in cash handling, and $185bn can be saved by digitising government disbursements.

Now, Citi is not so much pushing the idea of why digital money is necessary, but how and when the rest of the industry can invest in making digital money more of a reality. Naveed Sultan, global head of treasury and trade solutions at Citi, explains in this video how the approach to digital money has changed, and how digital money offers the potential for value creation.

He notes that a number of factors have to be in place for a market to be ready for digital money: government and market support, technology infrastructure, digital money solutions and a propensity to adopt. 

In a study of 90 markets and their readiness to adopt digital money, Citi ranks Finland first, with Singapore, the US, Sweden and Hong Kong following in the leaders' table. At the other end of the spectrum is Angola, ranked 89th and Chad in 90th place.

In developed markets there have been numerous innovations in the field of electronic payments. In this interview, Mr Sultan also explains how a large bank such as Citi approaches innovation and balances the need to create exciting experiences on the front end while also continuously improving the systems on the back-end to support the bank’s transactions.