As part of our Citi Treasury Dialogues series, Kanika Thakur, Head of Trade for Asia Pacific at Citi in Hong Kong, reflects on the impact of the pandemic and notes how COVID-19 has fast-tracked digitisation in corporate treasury.

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Holistic solutions

Kanika Thakur was named Head of Trade for Asia Pacific at Citi in August 2020, at a time of change and challenge.

In the year of the pandemic, her relationship with her clients evolved to reflect changes in their businesses and working situations as well as a shift in the very nature of trade itself.

She talks us through the learning curves of 2020 and highlights the disruption and innovation that digitisation and COVID-19 have brought to Asia and the world.

Corporates rushed to shore up liquidity and borrow in the immediate aftermath of the pandemic, says Kanika Thakur, Head of Trade for Asia Pacific at Citi, as she looks back over the tumultuous year. “Our clients were primarily focused on resilience.” Next, companies in the region quickly turned to finding solutions for their wider ecosystem of buyers and suppliers, solving problems beyond themselves in a holistic approach. “We advised on business-friendly solutions that allowed companies’ entire procurement chains to benefit from their corporate standing,” says Thakur, who is based in Hong Kong, upon her promotion.

“Clients increasingly looked at the sustainability of their supply chains and entire ecosystem to ensure they could buy from them. The ability for companies to interact with their buyers and sellers became critical.”

This led to an uptake in supply chain finance and receivable finance solutions. Citi also explored how its corporate clients could mitigate risk by partnering with export credit agencies. “We saw classic trade instruments like letters of credit and guarantees make a comeback. Open accounts based on trust and openness were not always feasible.”

Advisory demand

More than a year on from the initial impact, Thakur observes a new client demand for conversation and advice. Noting that travel restrictions are not an impediment to the bank’s advisory role, she says Citi has successfully built on existing relationships with corporates in the region through ongoing client engagement. Regular webinars on topical ideas featuring expert speakers continue to see interest from clients.

In September 2020, when the bank hosted its Asia Pacific Treasury and Finance Virtual Week, over 3,300 participants attended the five-day conference.

Digital trends

The pandemic has also accelerated existing digital trends. Before the pandemic, trade was still paper intensive for many of Citi’s clients, but many are now focused on building up their technological efficiency. “Technology is shaping the future of trade and many businesses accelerating their digitisation efforts,” she says, counting Citi’s own ongoing digital transformation amongst the cohort. “COVID-19 has accelerated the digital journey for us. We are looking at how we as a bank process our transactions,” she says.

The pandemic has also led the bank to connect and engage with clients differently, including linkages via APIs rather than traditional transaction banking models.

On the digitisation of trade more broadly, Kanika points out that trade involves numerous third parties like shipping and insurance agents that need to be included on electronic platforms. “The really interesting part is getting all these different parties onto electronic platforms so it can truly be seamless and without paper,” she said. “We are linking with platforms to make trade more electronic and digital”.

This includes partnering with fintechs, and Citi has made a number of investments in platforms leveraging blockchain. “We are looking at this in a holistic fashion, so that we can make significant changes more broadly, in addition to client connectivity,” she says.

Thakur also notes that governments are increasingly pushing for digital reporting of the whole trade cycle. “Governments are coming to the fore and we are working with regulators through ongoing dialogue and discussion,” she says.

As we look to the rest of this year, it seems clear that there have been some lasting shifts that have taken place this year as digitisation has been accelerated and relationships have adapted and evolved within a very new situation.

Where things will go next remains to be seen, but it is clear that the evolution of trade will continue and that the journey to digitisation that Citi is navigating its clients through, is ongoing and irrevocable.

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