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JANE FRASER

TYLER DICKSON1

Our multi-national team work as one with the world’s most ambitious and enterprising people, businesses and institutions to responsibly enable their economic progress and growth. We do so by providing meaningful connections to the right people, product and service wherever required in the world.

Citi Institutional Clients Group; Working As One

11If you are someone who is driven by always doing what’s right we would love to meet you. We think you would be right at home in an organization that’s determined to do the best we can for our clients and for our people.

11Thinking As One

STUART RILEY

EMILY TURNER

ANDY MORTON

CAREY LATHROP

SHAHMIR KHALIQ

SUNIL GARG

MANOLO FALCO

Citi Ventures harnesses the power of Citi to help people, businesses, and communities thrive in a world of technological, behavioral, and societal change. We invest in innovative startups and work with our colleagues, clients, and the innovation ecosystem to re-imagine financial services and build solutions that support economic growth.

Re-imagining As One

We reach our fullest potential by enabling an equitable and fully inclusive culture. The Citi family is one that’s worldly, diverse and entirely collaborative.

Living As One

Building on over two decades of sustainability experience, we have solidified our role as a leader in driving sustainable finance, in part by spearheading initiatives and shaping emerging norms and practices, often as the pioneer U.S. bank to do so. We’re proud of the work we’ve done so far but recognize there is still much more to do to protect and build a better future.

Sustaining As One

Val Smith

As the world's most global bank, Citi must play an important role in addressing the climate crisis and financing the transition to a low-carbon economy. A key aspect of enabling this transition is understanding and disclosing the potential impacts of our business on the climate, as well as the potential impacts of climate change on our business.
Today, Citi released our&nbsp;<a style="box-sizing: border-box; text-decoration-line: none;" title="http://www.citigroup.com/citi/sustainability/data/finance-for-a-climate-resilient-future-2.pdf" href="http://www.citigroup.com/citi/sustainability/data/finance-for-a-climate-resilient-future-2.pdf?ieNocache=896" target="_blank" rel="noopener">2020 climate disclosure report</a>, highlighting our progress in implementing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD recommendations are an important framework that guides our work in identifying, managing, and disclosing the risks and opportunities associated with climate change. This work also highlights the relationship between climate change and systemic risk, and how acting responsibly in line with public interests can mitigate risk.
Since the TCFD recommendations were first issued in 2017, the urgency of addressing climate change has continued to accelerate. 2019 was the second warmest year on record, and in 2020, we experienced devastating wildfire seasons in Australia and the West Coast of the U.S., and one of the most active hurricane seasons in the Atlantic.
We began reporting on our climate risk assessment in 2018, establishing our leadership as the first U.S. bank to release a TCFD report. Since then, we have been integrating climate risk awareness into our business activities and overall strategy, corporate governance and risk management. This year, we took steps to further integrate climate into our businesses, forming new sustainability-focused teams including a Sustainability and Corporate Transitions team in Banking, Capital Markets and Advisory, and an ESG team in Markets and Securities Services.
We made climate risk assessment a key pillar of our&nbsp;<a style="box-sizing: border-box; text-decoration-line: none;" title="https://www.citigroup.com/citi/sustainability/" href="https://www.citigroup.com/citi/sustainability/" target="_blank" rel="noopener">2025 Sustainable Progress Strategy</a>&nbsp;announced this summer, and we're continuing to focus on testing the resilience of our lending portfolios to transition risks and physical risks related to climate change. In addition to embedding this work across Citi, we're also ramping up our industry collaboration to adopt new methodologies to analyze the climate risk associated with our client portfolios &ndash; such as the Paris Agreement Capital Transition Assessment (PACTA) and the Partnership for Carbon Accounting Financials (PCAF) &ndash; and we will share updates on this work next year in our annual ESG Report.
I'm proud of the progress we've made so far. Some of the highlights in this TCFD report include:
<ul style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 18px; text-align: left; background-color: #ffffff; padding: 0px 0px 0px 20px;">
<li style="box-sizing: border-box; padding-bottom: 1em; line-height: 1.5em;">Enhanced cross-functional collaboration on climate issues, and expanded climate change governance and oversight, in line with increasing climate regulatory requirements;</li>
<li style="box-sizing: border-box; padding-bottom: 1em; line-height: 1.5em;">Further integration of climate risk within our Risk Management frameworks, and the strengthening of fossil fuel sector standards in our Environmental and Social Risk Management Policy;</li>
<li style="box-sizing: border-box; padding-bottom: 1em; line-height: 1.5em;">Additional scenario analysis for our oil and gas exploration and production portfolio, to better understand short-term impacts and our clients' resilience to a rapidly instituted carbon price;</li>
<li style="box-sizing: border-box; padding-bottom: 1em; line-height: 1.5em;">Physical and transition risk assessment of Citibanamex's commercial real estate and agriculture portfolios; and</li>
<li style="box-sizing: border-box; padding-bottom: 1em; line-height: 1.5em;">Physical risk assessment of our own facilities to test the climate resilience of our operations.</li>
</ul>
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Looking ahead, we know there's much more to do as we continue our work to decarbonize our business and support the low-carbon transition. Achieving this kind of macroeconomic change will require a unique combination of analysis, data, partnership, and innovation, as well as durable climate policy. This latest TCFD disclosure is a part of our commitment to accelerate our assessment and understanding of the climate risks faced by Citi and our clients. Our ability to improve our analysis of climate-related risks, however, also relies on our clients continuing to improve their own climate-related reporting. We can't do this alone, and it's critical that we all continue to work together and take concrete steps towards a more sustainable and climate-resilient future.
To hear more about our work, check out the&nbsp;<a class="external" style="box-sizing: border-box; text-decoration-line: none;" title="https://www.politico.com/sponsored-content/2020/confronting-disruption?cid=202011in" href="https://www.politico.com/sponsored-content/2020/confronting-disruption?cid=202011in" target="_blank" rel="noopener">latest episode</a>&nbsp;of POLITICO's Global Translations podcast, where we're in conversation with Mindy Lubber, President of Ceres.

https://blog.citigroup.com/2020/12/2020-tcfd-report-our-climate-risk-disclosure/

As the world's most global bank, Citi must play an important role in addressing the climate crisis and financing the transition to a low-carbon economy. A key aspect of enabling this transition is understanding and disclosing the potential impacts of our business on the climate, as well as the potential impacts of climate change on our business.

2020 TCFD Report: Our Climate Risk Disclosure

Citi&rsquo;s extensive efforts to expand the availability of affordable housing include providing affordable housing developers with a range of financing solutions, such as construction and permanent lending, tax credit equity, and Fannie Mae and Freddie Mac mortgage banking. In 2019, Citi Community Capital&mdash;the unit through which the firm finances all types of affordable housing and community development projects&mdash;reported over $6 billion in lending for affordable rental housing projects. Partnering with developers, non-profit organizations and local governments, Citi has helped create or preserve nearly 488,000 affordable housing units over the past decade.
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&ldquo;As the largest affordable housing lender in the United States, Citi is a leader in the effort to increase the availability of affordable rental housing for the nation&rsquo;s workforce and most vulnerable populations,&rdquo; said Citi CEO Michael Corbat. &ldquo;This transaction represents an important next step in expanding Citi&rsquo;s commitment to ensuring that all families have access to safe and affordable housing.&rdquo;
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As part of the transaction, Citi worked exclusively with women, veteran and minority-owned broker-dealers, including active bookrunners Blaylock Van LLC; CastleOak Securities, L.P.; Loop Capital Markets LLC and Samuel A. Ramirez &amp; Co. Inc. Academy Securities, Inc.; Great Pacific Securities; MFR Securities, Inc.; Roberts &amp; Ryan Investments Inc. and Siebert Williams Shank &amp; Co., LLC also served as co-managers on the transaction.
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&ldquo;Citi continues to reaffirm its commitment to diversity and inclusion. The selection of CastleOak Securities, L.P. as joint lead manager on Citi&rsquo;s $2.5 billion social bond to increase affordable housing in the nation&rsquo;s most vulnerable populations highlights how Citi continues to be a catalyst for change,&rdquo; said David R. Jones, Co-Founder, President and Chief Executive Officer, CastleOak Securities, L.P.
The transaction builds on a key objective of Citi&rsquo;s <a href="https://www.citigroup.com/citi/racial-equity/" target="_blank" rel="noopener">Action for Racial Equity</a>, a far-reaching effort to provide more than $1 billion in strategic value for communities of color to help close the racial wealth gap. Through Action for Racial Equity, Citi has pledged an additional $550 million to support homeownership for people of color and develop affordable housing with minority developers over the next three years.
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&ldquo;Our Social Bond Framework for Affordable Housing and accompanying inaugural offering strengthens our partnerships with clients around the world and responds to increasing investor interest in social bonds and broader ESG initiatives,&rdquo; said Michael Verdeschi, Treasurer of Citi.
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In conjunction with the bond offering, Citi unveiled a new Social Bond Framework for <a href="https://www.citigroup.com/citi/fixedincome/data/affordable_housing_bond.pdf?ieNocache=1" target="_blank" rel="noopener">Affordable Housing</a> to detail how projects and assets will be selected. Citi will publish an Affordable Housing Bond report detailing use of funds and allocation. Sustainalytics has reviewed Citi&rsquo;s Social Bond Framework for Affordable Housing and confirmed in their <a href="https://www.citigroup.com/citi/fixedincome/data/opinion_by_sustainalytics.pdf?ieNocache=1" target="_blank" rel="noopener">Second Party Opinion</a> alignment with the four pillars of the ICMA Social Bond Principles 2020.
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&ldquo;As a responsible investor, APG has encouraged growth in the social bond market and is pleased to see issuers facilitating access to affordable housing in the United States. These social bonds offer an opportunity for attractive risk-adjusted returns, while contributing to the UN Sustainable Development Goals by financing safe, high-quality homes for historically underserved communities and families across the country,&rdquo; said Scott Cavanagh, Senior Credit Analyst at APG Asset Management US, Inc.
This transaction is consistent with Citi&rsquo;s pledge to align community engagement with the UN Sustainable Development Goals (SDGs). Affordable Housing Bonds issued under this Framework advance SDG 11.1 (Sustainable Cities and Communities), ensuring universal access to adequate, safe and affordable housing by 2030.
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&ldquo;The pressure on families and individuals to be able to make rent and mortgage payments has increased, with the pandemic exacerbating that stress,&rdquo; said Richard Gerwitz, Co-Head of Citi Community Capital. &ldquo;This unique offering will provide funding to help confront the challenges we face as a country in providing safe, affordable housing options for the communities where we work and live.&rdquo;
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Read the report <a href="https://www.citigroup.com/citi/fixedincome/data/affordable_housing_bond.pdf?ieNocache=118">here</a>.

 Citi today announced the issuance of its first Affordable Housing Bond. The transaction consisted of a $2.5 billion 4-year non-call 3-year fixed to floating rate note issuance, the largest-ever social bond from an issuer in the private sector. The use of proceeds from the bond will finance the construction, rehabilitation and preservation of quality affordable housing for low-and moderate-income populations in the United States, building on Citi’s record as the largest financer of affordable housing in the country.

Citi Announces Inaugural $2.5 Billion Affordable Housing Bond Issuance and Largest-Ever Social Bond

This new strategy, integrated into Citi&rsquo;s Environmental and Social Policy Framework, will focus on three key areas over the next five years:
 &bull;Low-Carbon Transition: Citi aims to finance and facilitate an additional $250 billion in low-carbon solutions, in addition to the $164 billion the bank counted toward its $100 billion Environmental Finance Goal (2014-2019). This new goal includes financing and facilitating activities in renewable energy, clean technology, water quality and conservation, sustainable transportation, green buildings, energy efficiency, circular economy, and sustainable agriculture and land use. Citi said it will continue to develop financing structures and seek opportunities to scale positive impact in these areas while supporting clients across all sectors in the low-carbon transition.
 &bull;Climate Risk: Measuring, managing, and reducing the climate risk and impact of Citi&rsquo;s client portfolio is a key aspect of a low-carbon transition. Citi has been a leader in climate assessment and disclosure in alignment with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, releasing its first TCFD report in 2018. Citi said it will further test the resilience of its lending portfolios to transition risks related to climate change, and continue to disclose in line with TCFD. The bank will begin measuring the climate impact of its own portfolios and their potential alignment with 1.5 and 2 degree Celsius warming scenarios. Citi is also joining the Partnership for Carbon Accounting Financials (PCAF), a global framework for financial institutions to measure and disclose the emissions of lending portfolios and create a global carbon accounting standard for financial institutions. These various efforts will inform how Citi analyzes, engages, and collaborates with our clients going forward.
 &bull;Sustainable Operations: This strategy includes fourth generation operational footprint goals focused on GHG emissions, energy, water, waste reduction, and sustainable building solutions. Since 2005 Citi has reduced 3,600 GWh of energy use and avoided 2.4 million MTCO2e. While climate science requires global CO2 emissions to be reduced by 45% by 2030, Citi is accelerating that timeline with a 45% reduction target in CO2 emissions by 2025. Citi expects to meet its goal of sourcing 100% renewable electricity to power facilities globally before the end of 2020. In April, Citi was awarded LEED Platinum certification for its global headquarters in New York, which represents a milestone in its sustainable operations.
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Citi has was the first major US-based signatory of the Principles for Responsible Banking. Additionally, in May, Citi announced the issuance of the firm&rsquo;s first USD-denominated benchmark green bond. This bond follows Citi&rsquo;s inaugural Euro-denominated green bond benchmark issued in January 2019. Citi says that an amount equal to the net proceeds of this green bond will fund renewable energy, sustainable transportation, water quality, and conservation, energy efficiency, and green building projects as outlined in Citi&rsquo;s Green Bond Framework.
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Find out more about the 2025 Sustainable Progress Strategy <a href="https://www.citigroup.com/citi/sustainability/">here</a>.

 Citi today announced its new five-year 2025 Sustainable Progress Strategy to help accelerate the transition to a low-carbon economy. This new strategy includes a $250 billion “Environmental Finance Goal” to finance and facilitate climate solutions globally. This builds on Citi’s previous $100 billion goal announced in 2015 and completed last year, more than four years ahead of schedule.

Citi Earmarks $250 Billion to Finance and Facilitate Climate Solutions

DOWNLOAD

Michael Guralnick

Swati Mitra

For forward-thinking companies, adopting sustainable practices is proving attractive because they are generally more resilient to shocks, more financially robust, and exhibit greater long-term growth potential. &nbsp;Environmental, social and governance (ESG) agendas are fast becoming a way of demonstrating a company&rsquo;s value and potential.&nbsp;
During this period of rapid change, finance and treasury organizations should embrace the opportunity to play a more strategic role in pursuing initiatives related to ESG. An acceleration of digitization initiatives, along with the post COVID-19 implications for supply chains, workforce and corporate culture, is creating an environment where ESG will become an even more important consideration.
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The opinions expressed in this blog are solely the authors; and do not reflect the views of Citi.
Technological advances have spurred a golden age of innovation in the insurance sector, creating value and opportunity for players inside and outside the industry―including Citi and other large financial institutions.
Historically, the insurance industry has been slow to innovate and reluctant to prioritize technological investment. That is changing, however, as insurers and other players embrace and capitalize on emerging technologies to find new growth opportunities, increase customer satisfaction, reduce costs, and maintain a competitive edge in a rapidly changing world.
Improved analytics, artificial intelligence (AI), and machine learning (ML) are giving insurers new and superior tools to assess risk and underwrite customers. Digital distribution is growing, allowing firms to reach and build relationships with customers in novel ways. Meanwhile, smartphones and automation are making claims management and client service more efficient and effective. For example, filing auto insurance claims traditionally required time-consuming phone calls, paperwork, and visits to body shops&mdash;but now mobile apps from companies specializing in claims management can complete the entire process in a few hours.
Taken together, these innovations are powering a&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://www.mckinsey.com/industries/financial-services/our-insights/insurtech-the-threat-that-inspires" target="_blank" rel="noopener">vibrant insurtech ecosystem</a>&nbsp;of rising challengers, evolving incumbents, and entirely new entrants including major technology companies. Investors in the global fintech sector are taking notice: Between Q2 2019 and Q2 2020, insurtech investments&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://www.cbinsights.com/research/report/fintech-trends-q2-2020/" target="_blank" rel="noopener">totaled $7.6 billion</a>, with&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://www.cbinsights.com/research/report/insurance-tech-q2-2020/" target="_blank" rel="noopener">11 deals valued at over $40 million</a>&nbsp;in Q2 2020 alone.
Data-Driven Underwriting
In banking and insurance, the underwriting process of evaluating customer risk and setting appropriate premiums is the lifeblood of business success. Digitization is helping insurers do this in three ways:
1. Data collection and management:&nbsp;Insurers are collecting large amounts of data from novel sources&mdash;including public records, sensor-equipped Internet of Things (IoT) devices, and even the behavior of industrial workers&mdash;to identify and understand trends and patterns. Auto insurers traditionally have set insurance rates through pricing algorithms based on demographic data including customer age and ZIP code. New entrants into the auto insurance space are collecting customer smartphone data to assess driving behaviors such as braking, turning, and phone use while behind the wheel. Similarly, other companies in the space have begun giving discounts to home insurance customers who install an IoT home sensor kit to monitor motion, temperature changes, water leaks, and alarms&mdash;helping prevent home damage and reduce insurance claims.
2. Advanced analytics and predictive modeling:&nbsp;AI and ML help insurers better analyze increasingly large and disparate data sets. For example, one new insurance company has begun using ML and behavioral science insights to decrease fraud and increase trust among policyholders&mdash;an approach that allows the company to approve claims in a fraction of time compared to legacy methods.
3. Decision making:&nbsp;Collecting and analyzing more data helps insurers make informed decisions&mdash;such as calculating premiums, screening applicants, creating customer risk profiles, detecting fraud, identifying target markets, and predicting customer behavior. This data in turn can inform a company&rsquo;s forecasting and prevention models, which can help them save significant costs and accelerate claims processing.
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Digital Distribution 
Human agents remain the top distribution channel for insurance industry products and services. However, digital channels including online, social media, mobile, and e-commerce partnerships are quickly gaining share and importance, making omni-channel marketing a must.
For tech-savvy Millennial customers, seamless digital signup at price comparison websites and insurance exchanges is leading to higher conversion rates.&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-blog/how-smart-insurers-convert-digital-customers-at-six-times-the-rate-of-their-peers" target="_blank" rel="noopener">A 2017 analysis</a>&nbsp;of major U.S. property-and-casualty carriers found that one online-only carrier was converting prospects at a much higher rate than other insurers. The same report estimated that an auto insurer with $10 billion in annual premium income could generate $400 million in additional premiums by boosting its online conversion rate 20%.
We're also seeing some insurers form alliances with digital partners to offer discounts to customers, as well as insurtechs allowing customers to purchase insurance through basic mobile phones. This helps them reach a broader customer set, including those in developing countries who lack access to the internet.
Claims Management and Client Service 
Technology is also driving new efficiencies in claims management, the process of checking the merit of a customer's claim and assessing an appropriate payout. AI, ML, and robotic process automation (RPA) are saving insurers money by automating claims, underwriting, sales, and service tasks. Moreover, digitization is improving record management&mdash;reducing manual processing, improving compliance, and simplifying claims settlement.
Insurers also are leveraging self-service apps and tools to lower costs and increase customer engagement and retention. For example, many companies are allowing customers to share pictures with their claim submission through the company's mobile app, allowing the insurers to easily inspect the damage. This assists in claims processing, appraisals, and adjustments.
Emerging Opportunities 
As insurtech comes of age, startups are focusing on niche products, data-driven insights and automation, and superior customer experiences. Incumbents, meanwhile, have three key roles to play within emerging digital insurance ecosystems:
Participation:&nbsp;Offering a service by integration with a digital platform. For instance, large insurance players are integrating with popular virtual assistants, thereby entering consumers' homes and daily lives.
Orchestration:&nbsp;Bringing together services from different ecosystem participants on a single platform. For example, one financial services provider developed an account portal that offers customers healthcare consultations, auto sales, real estate listings, and banking services, and has converted millions of those accessing the portal into insurance buyers.
Creation: Developing new ways to bring participants together to reduce business process friction and make insurance faster, cheaper, and better. For example, many large global insurers and reinsurers have created a consortium that provides insurance solutions on a blockchain platform.
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These ecosystems also offer business and growth opportunities for large financial institutions such as Citi. Citi Ventures is actively assessing insurtech investment opportunities, particularly around digital distribution solutions.
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Technological advances have spurred a golden age of innovation in the insurance sector, creating value and opportunity for players inside and outside the industry―including Citi and other large financial institutions.

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The opinions expressed in this blog are solely the authors' and do not reflect the views of Citi.
From Amazon's one-click ordering to Uber Cash, we are seeing a trend of non-finance companies embedding financial services into business-to-consumer (B2C) commerce and making it a fundamental part of their tech stacks and business models. We are seeing a similar trend in business-to-business (B2B) commerce through the advent of Embedded Trade, or the integration of financial services into physical supply chain activities such as ordering and shipping goods.
In recent years, we have seen an evolution in digital freight models that has disrupted the global trade ecosystem and propelled the convergence of previously separate supply chain logistics and financial systems. This convergence promises significant opportunities for banks like Citi and other financial service providers to grow by embedding financial products into B2B trade and commerce.
<h3 style="box-sizing: border-box; margin: 0px 0px 10px; font-size: 16px;">PARALLEL UNIVERSES</h3>
Within the global trade ecosystem, logistics and financing have traditionally operated in parallel universes, each consisting of a complex web of players using paperwork-intensive processes and outdated technology to facilitate each step in the supply chain.
For example, today&rsquo;s ocean freight shipping involves a half-dozen or more contractors and subcontractors who each handle specific steps of the shipping journey&mdash;route planning, preparing trade documents, clearing customs, loading cargo onto ships, and trucking goods to their final destinations. Alongside these steps, importers and exporters typically undergo a separate, similarly complex process to secure trade financing.
This disconnect between physical and financial supply chains is one of the primary reasons for an&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://www.weforum.org/agenda/2020/02/exporters-mind-trade-finance-gap/" target="_blank" rel="noopener">estimated $1.5 trillion worldwide trade finance gap</a>, which renders many small and medium-sized enterprises (SMEs) unable to access the traditional trade finance products offered by banks and other institutions.&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="http://www3.weforum.org/docs/WEF_GETR_2016_report.pdf" target="_blank" rel="noopener">According to the World Economic Forum</a>, inadequate trade finance is one of the top three export obstacles for half of the world's countries&mdash;particularly poorer nations&mdash;and constrains global growth and development.
There is room for improvement when it comes to the customer experience in the freight shipment process. Quoting and booking for a single shipment can require 100 hours of email interaction, and tracking shipments in real-time is difficult, time-consuming, and error-prone, with many steps relying on personal handoffs and even faxes.
Unlike tech startups born in the digital age, freight shipping lags behind other industries in technology adoption. This is changing with demand rapidly growing for digitization to improve transparency and visibility, shipping times, and customer experience.&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://www.supplychain247.com/article/freight_forwarder_consolidation_continues/Freight_Forwarding" target="_blank" rel="noopener">In a 2019 industry survey</a>, 49% of respondents said they currently use a mix of digital solutions in their logistical processes, including online marketplaces and tracking tools. More than 30% said that such technology represents an important part of their overall strategy.
<img class="w100" style="box-sizing: border-box; border-width: 0px; vertical-align: middle; width: 980px; font-size: 14px;" src="https://www.citi.com/ventures/images/article/Embedded-Trade-graphic.jpg" alt="" />
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<h3 style="box-sizing: border-box; margin: 0px 0px 10px; font-size: 16px;">INCREASING DIGITIZATION</h3>
The demand for improvements coupled with technological advances has produced a wave of digital freight shipping disruptors that emphasize connectivity, visibility, and analytics to improve delivery speed, reduce costs, and enhance customer experience. As a result of customer frustration, for example, many digitally native freight logistic start-ups including&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://www.flexport.com/" target="_blank" rel="noopener">Flexport</a>,&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://forto.com/en/" target="_blank" rel="noopener">Forto</a>&nbsp;(formerly FreightHub), and&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://transfix.io/" target="_blank" rel="noopener">Transfix</a>&nbsp;have emerged to address customer pain points and deliver a more intuitive shipping process.
Meanwhile, fintechs and logistic technology (logtech) startups have made inroads with more seamless digital versions of financial products and services previously offered solely by traditional financial institutions. These include supply chain financing, purchase order financing, and receivables factoring. U.K.-based&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://beacon.com/" target="_blank" rel="noopener">Beacon</a>&nbsp;serves as the booking agent between importers and exporters while facilitating door-to-door shipping and finance through a single platform. And&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://haveninc.com/" target="_blank" rel="noopener">Haven</a>, a digital freight enabler, produces end-to-end Transport Management System (TMS) software provides freight rate discovery, booking, workflow coordination, documentation, and tracking and analytics services.
Faced with digital disruption, incumbent players in the trade ecosystem have focused on tying freight shipping decisions to the purchase of financial products through integrated quoting and invoicing products. Maersk, the world's largest container ship and vessel operator, has partnered with IBM to create&nbsp;<a style="box-sizing: border-box; text-decoration-line: underline;" href="https://www.maersk.com/news/articles/2019/07/02/hapag-lloyd-and-ocean-network-express-join-tradelens" target="_blank" rel="noopener">TradeLens</a>, a blockchain-based ecosystem of supply chain partners&mdash;including cargo owners, ocean and inland carriers, freight forwarders, logistics providers, ports and terminals, and customs authorities&mdash;that promises to quickly and reliably share documents and shipping data.
Meanwhile, disruptors have looked to fill the trade finance gap by leveraging the data they gather on shipments to offer more innovative financial products and induce non-traditional financiers to back the funding of shipments.
<h3 style="box-sizing: border-box; margin: 0px 0px 10px; font-size: 16px;">GROWTH OPPORTUNITY</h3>
A global trade ecosystem in which managing supply chain activities and purchasing financial products are merged into a single, automated process that emphasizes ease-of-use and a seamless user experience presents a growth opportunity for banks and other financial institution. Global banking institutions, like Citi, already play a critical role in facilitating global trade and support shippers, carriers, freight forwarders, brokers, and other key stakeholders.
Citi Ventures and Citi&rsquo;s Treasury and Trade Solutions business are partnering to explore the concepts, companies, platforms, and players that best exemplify Embedded Trade opportunities.
We believe this is an emerging trend to watch and look forward to seeing continued innovation in this sector.
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From Amazon's one-click ordering to Uber Cash, we are seeing a trend of non-finance companies embedding financial services into business-to-consumer (B2C) commerce and making it a fundamental part of their tech stacks and business models. We are seeing a similar trend in business-to-business (B2B) commerce through the advent of Embedded Trade, or the integration of financial services into physical supply chain activities such as ordering and shipping goods.

Embedded Trade: An Emerging Growth Opportunity

LEON KALVARIA

DIANE  ARBER

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