Real-time Liquidity Offering that Extends Cash Concentration to Non-business Days

Citi has launched a new cash concentration capability designed to mobilize and concentrate liquidity seven days a week. Changing consumer behavior, the increased use of instant payments, and a proliferation of new e-business models are moving treasury management toward real-time and this is now another step closer.

Cash concentration is a corporate treasury practice that involves the transfer and sweeping of funds from multiple accounts to a single account to help optimize the use of available funds for business expenses or investments. At Citi, institutional clients use sweeps to automatically transfer cash balances between accounts held at Citi branches based on pre-standing parameters or instructions of periodicity, timing and amount.

Historically, the automated sweeping of funds among accounts in a client’s cash management pools has not been executed on weekends and holidays, creating an inconsistent cash concentration experience. During those times, funds would need to be manually transferred, ensuring sufficient liquidity to mitigate paying overdraft fees associated with increased credit utilization caused by payment activity on non-business days or after hours.

“Cash concentration is a simple and efficient solution used by companies to help optimize interest income and reduce interest costs across accounts in their sweep structures,” said Michael Berkowitz, Global and North America Head of Product Management, Liquidity Management Services with Citi’s Treasury and Trade Solutions (TTS). “With a growing number of companies running their businesses 24X7, we’ve seen an increase in the demand for seven-day sweeps, particularly among fast-moving, high-growth technology and e-Commerce companies.”

“For companies in these sectors, and others, the momentum toward real-time cash management is transforming the way liquidity is managed,” added Stephen Randall, Global Head of Liquidity Management Services for Citi’s TTS business. He explains: “With instant payments and other seven-days-a-week operating activities driving ebbs and flows in liquidity levels, cash concentration structures must be able to respond quickly to those fluctuations. Our 7-Day Sweeps solution is designed to address this need by extending the automated funding of negative balances and centralization of positive balances to non-business days, helping to reduce risks, increase efficiency and optimize liquidity all year round.”

Citi 7-Day Sweeps is being rolled out in a phased approach, initially focusing on key treasury and cash concentration centers catering to real-time payments. Citi has enhanced its Global Concentration Engine platform, with new functionality for this upgrade and will continue to invest in technology to help ensure a consistent client experience globally. The offering is now available for domestic cash concentration structures in the U.S. and South Korea, with plans to expand to additional markets.

Citi Treasury and Trade Solutions enables our clients' success by providing an integrated suite of innovative and tailored cash management and trade finance services to multinational corporations, financial institutions and public sector organizations across the globe. Based on the foundation of the industry's largest proprietary network with banking licenses in over 90 countries and globally integrated technology platforms, TTS continues to lead the way in offering the industry's most comprehensive range of digitally enabled treasury, trade and liquidity management solutions.

About Citi

Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in more than 160 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services.

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