‘Data helped us expand borrower base in supplier finance segment’:


Mridula Iyer, head – treasury & trade solutions (TTS), Citi South Asia

The use of data and analytics has enabled Citi to expand its borrower base in the supplier finance vertical in India, Mridula Iyer, head – treasury & trade solutions (TTS), Citi South Asia, tells Shritama Bose. The setting up of new umbrella entities (NUEs) should help drive innovation in the business-to-business (B2B) segment, she added. Excerpts:

The digital payments ecosystem in India has greatly evolved over the last decade. While we know about the strides made in consumer payments, have companies been as agile in adapting their systems to the evolving scenario?

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Digitisation is now at the core of corporate strategies. It goes beyond cost saves, which corporates were previously focused on, and the focus is now on bringing about efficiencies in their sales and distribution processes as well as in sales enablement, including the way they deliver experience to their customers. Corporates are very open today to leveraging technologies like API and using new channels like UPI, QRs, NACH, etc., in order to digitise their engagement with the entire ecosystem.

In the pandemic, corporates who had digital as part of their core strategies have benefited more than firms that were just starting on their digital journey. Citi’s own experience has been that over the last few years, we have been trying to assist corporates in their whole digital transformation. During the pandemic it was easier for our customers to be up and running as soon as the lockdown was in effect because they were well-integrated with the bank and they had all their digital solutions in place. In our experience, banks are increasingly becoming digital advisors to companies in their digitisation journey.

The payments space in India has become a place where everybody wants a slice of the pie. As licences for NUEs are issued, how do you see the landscape changing? Have you also applied for a licence?

The NUE is a very interesting and innovative initiative and we can say that India today leads the pack in terms of digital solutions, when compared to some of the developed markets, which are trying to emulate what we have done. In spite of that, there is scope for a lot more players and solutions to come in so that we can accelerate the pace of digitisation. The NUEs will bring a lot more innovation into the payment system. Data will be a very big part of how these players build their products. But even beyond data, there will be ample scope for NUEs to work on new payment solutions, especially in the field of business-to-business (B2B) payments. It will be interesting to see how this space evolves.

Citi, like other foreign banks, has traditionally stayed away from lending to very small businesses in India. Do you see that changing with the way data and analytics capabilities are evolving now?

Definitely yes. When I look at Citi’s example, we have dedicated business segments that look after banking needs of MSMEs, partnership and proprietary firms and private limited companies. In addition, we run a strong and successful supplier finance programme. We have also recently launched a distribution finance programme. I believe data and analytics are going to play a very strong role in financing decisions. With so many data points available and the digital repositories such as e-invoicing, GST, etc., there is an opportunity for banks to make underwriting decisions and expand it to a wide range of companies. The payments data available with us, for example, can help in faster onboarding decisions, and we have been able to expand this programme to more suppliers.

Large Indian PSBs are investing in the supply chain financing vertical. Does that mean older players like you are having to do things any differently?

There is a lot of opportunity in the supply chain financing space, given that traditionally there has been a lack of credit to some segments. Even globally, the supply chain finance business is a $3-trillion opportunity and what banks and other players are doing is less than 10%. Likewise, in India, there is tremendous scope. Citi has introduced multiple innovations in our product offering and there are various market firsts that we bring to our clients.

For example, we provide an end-to-end digital platform for supplier financing, seamless paperless onboarding with complete information available online. So the way we are trying to maintain our market leadership is by bringing in more technology innovation into our product offering. Another way is through fintech partnerships. We are actively engaged with fintechs to build differentiated solutions in this space, using some of the new technologies.

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