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

-11-

This is not the end. It is not even the beginning of the end. But it is,

perhaps, the end of the beginning. - Sir Winston Churchill

January, 2013