Copyright The Asian Banker All rights reserved 1 The Asian Banker Integrating payments across business segments to improve efficiency Best practice examples in international banks November 2009

Copyright The Asian Banker All rights reserved 2 Key discussion notes 1.Standard Chartered leverages capabilities in wholesale transaction banking for retail payments 2.Citibank’s convergence of retail and wholesale payments 3.Deutsche Bank integrating trade and cash management in the front and back office

Copyright The Asian Banker All rights reserved 3 Source: Asian Banker Research Global banks are restructuring payments to streamline operations, like Standard Chartered… Standard Chartered Bank  Has a transaction banking head for consumer payments  Leverages capabilities in the wholesale payment division into the consumer transaction channels by taking advantage of relationships that touch both wholesale banking and consumer banking.  This could mean any retail business that would have transaction banking needs in its back office, and consumer payment needs in its front office.

Copyright The Asian Banker All rights reserved 4 Citi converged retail and wholesale payments backend where it makes sense… Citi  Going down a similar route conceptually in its mobile phone-based remittance programme.  Normally, these operations would be handled by the retail banking division, but Citi's Global Transaction Services handles this business in markets like India.  Convergence made possible because of agnostic application of technology

Copyright The Asian Banker All rights reserved 5 Deutsche Bank does integrate trade and cash both on the front and back ends Deutsche Bank  Breaking down product silos within transaction banking business by creating products that straddle businesses.  It developed a dual trade finance and cash management solution in Indonesia that it has taken to other markets. Both trade finance and cash management businesses under the same division head.  In India, the bank even sells cash management and trade finance solutions through the same sales team.  The bank is also working on a cash management and FX tool that actually crosses divisions (dbFX4cash).

Copyright The Asian Banker All rights reserved 6 Source: Deutsche Bank Deutsche’s take on transaction banking consolidation Trends Price Pressures Increasing Regulatory Investments Increasing Sophistication of Solutions Scale is Key to Survival CustomerSales/ServiceProduct MgmtProcessingClearing CustomerSales/Service Distribution Bank Transaction Bank Resulting Business Models

Copyright The Asian Banker All rights reserved 7 1.How do to measure revenue per dollar transaction in banks? 2.How to build a payments distribution network in a commercially sustainable manner, instead of just assuming it will work? 3.The sticky transactions that retain core customers are not the transactions that give us the market share or profitability – so what do we do? (European numbers: 24% revenue: 9% profit: 90% CIR: pushing industry CIR from 59% to 64%) 4.What is the benefit of making Payments a part of an overall transaction banking infrastructure, and what models are out there that can show us how to do it? The Questions we Ask

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