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Citi proprietary
The Future of Digital Money
London, UK, January 2013
Don Callahan
Chief Technology & Operations Officer
DATE -1-
Every morning, as the sun rises over the African plains, a
gazelle wakes up and knows it must outrun the fastest lion or
risk being killed…
…. And every morning, a lion wakes up and knows it must
outrun the slowest Gazelle or risk starving to death.
It does not matter whether you are the Lion or the Gazelle….
….when the sun comes up, you’d better be running
The emergence of a Digital Information Age - A profound redefinition of human
connection and community
-2-Source: Portio Research, Institute of Physics (2012), Internet World Stats , FacebookJanuary, 2013
ConnectivityDigitization
Law 1: Moore’s Law Law 2: Metcalfe’s Law
+
Visualization of Facebook’s network –
more than 1 billion users within 8 years
20131981
Digital Money has the potential to not just transform commerce, but to transform
communities
January, 2013 -3-
Mobile Payment Users(by region, M)
Mobile Payment Transaction Value(by region, Bn)
Source: Gartner
500
200
400
User
(#M)
300
100
0
448
384
324
267
212
160
112
70
North AmericaAsiaLatAm EuropeMiddle East and Africa
5926
700
600
500
Value
($Bn)
400
300
200
100
0
617
473
353
256
172
106
2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016
The ecosystem is slowly maturing and concentrating - but not everywhere
-4-January, 2013
Handset
MakersDifferentiated by Brand
not Technology
Digital
MoneyMany players, many
solutions, no answer
OS
ProvidersIncreasingly
Concentrated
Mobile
OperatorsControlled by a few,
dominant players
Powerful technology and behavioral trends are fuelling the adoption of digital
money – but we are still a few years off
Source: Citi Digital Strategy Team, Gartner -5-
Digitization
Connection
Consumer
Choice
Looking Forward
Past FuturePresent
January, 2013
Evolution of Sports: leverage technology to
change behaviour
Target: help people
achieve physical health
Evolution of Banking: leverage technology
to provide products and services
Target: help people
achieve financial
health
Today, consumer are not yet adopting en masse and payments have not yet ignited
-6-
Early Majority
Early
Adopter
Innovators
Laggards
Late
Majority
Next 12-24 months
> 24 months
Developed Market – Mobile Payments
Too many useful things creates
too many useless people - Karl Marx
Entertainment Empowerment
Source: Mobile Interest Survey Forrester Research (2012)
1% - Already Use
17 % Interested in
Using
‘Interest in using mobile
for in-store payments)?’
13% Neutral
69% Not Interested
January, 2013
Consumers will need to be convinced that the new solutions will work effectively
and safely before they will adopt
-7-
Interoperable & AvailableSolutions must be interoperable and widely
accepted in order drive adoption and usage
Intellectually CompellingSolutions must address an essential need,
deliver value, work consistently and reliably
Emotionally CompellingTrusted… Aspirational…Enjoyable
1
2
3
For new technology to replace old it
has to have ten times the benefit- Peter Drucker
January, 2013
Compelling solutions will require front end innovation operating on industrialized
financial platforms with clear 'rules of the road'
-8-January, 2013
Industrialized Back OfficePlatform-oriented
Innovative
Front OfficeConsumer-oriented
Clear RulesRegulation
At Citi, we are building on our existing momentum and working to capture digital
opportunities across our consumer and corporate businesses
-9-January, 2013
Consumer
Clients
Corporate
Clients
Our partnership with America Movil illustrates the importance of leveraging
partnerships to connect end-to-end flow across consumer and corporate segments
-10-January, 2013
Wk
37
Wk
35
Wk
33
Wk
31
Wk
29
Accounts
(K)
Wk
27
Wk
25
Wk
23
Wk
21
Wk
19
Wk
17
Wk
15
Wk
13
Wk
11
Wk
9
Wk
7
Wk
5
Wk
3
Wk
1
Wk
19
Wk
17
Wk
15
Wk
13
Wk
11
Wk
9
Wk
7
Wk
5
Wk
3
Wk
1
Balance
(MXP)
Wk
37
Wk
35
Wk
33
Wk
31
Wk
29
Wk
27
Wk
25
Wk
23
Wk
21
EOP Balance (in MXP)
EOP Balance (Debit cards only)
Registered Accounts
Massive uptake when we
integrated government
payments
Balance
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