Okay, thank you. Thank you very much, Jane, for coming down particularly because I know you have a lot on your plate right now. And actually, there's nothing going on in the world at the moment. Have you absolutely nothing boring? Completely. You have nothing else to do than being here, right? And actually we were saying that early on by the way we could be doing this in Spanish for the Latin American crowd but we were just doing the Jane totally fluent. Anyway, we stick to English. But we were saying that it's great to have you here in person because last time that you were at Sibos it was virtual. It was during the pandemic.
So it that feels like a lifetime ago. Thank goodness. So hopefully that's one of the things we never go back to. But I know all of us at Citi led by our wonderful team, we're thrilled to be here. It's lovely to see so many friends and clients and to have decent weather.
Completely. So anyway, let's get going and let's start with the macro view. So global business have navigated many shocks in the recent years, the pandemic being one of them, but of course there's been many more since. But yet actually global commerce has proven to be very resilient. So has there been a shift in how companies decide where to invest and build supply chains, manage risk?
You know, one's often asked is globalization dead with all the fragmentation that's going on and I think what we see in trade is a more accurate view of what's happening in the world that trade is not in retreat it's just being rerouted around the world and we're seeing that say the North America auto flows into China and vice versa dramatically down at the same time you're seeing say the growth between particularly China and Africa, Latin America, Middle East really exploding. So you're seeing new corridors opening up. You're seeing a lot of change going on. And we've seen it our trade flows just in the first half of the year were up in double digits. So there's an awful lot of activity going on. And I think as you rightly say, it's a lot of resiliency that's being built up and I do find it remarkable and how impressive it is how much companies have adapted because you think of COVID. We think of the Ukraine war, we think of most recently, you know, the Middle East crisis which has become a global issue, not a regional one. That's put an enormous amount of challenge into everybody. And one of the problems of companies is that they've had to not only look at how do they build resiliency, they've also had to fund it at the same time. So, it's been a little bit of you have to have your cake and eat it without putting on calories. If anyone finds the answer to that one, please do tell me. And so this buildup of resiliency is more physical in nature as well as financial in nature. I know we've been putting a lot of time into how do we help our clients release trapped liquidity around the world at the moment. It's over 70% of the pain points that we're hearing from clients is coming from that releasing of liquidity. And there's a lot of different solutions that we're putting in to do that. But resiliency is absolutely fundamental and we shouldn't just think of it as being a cost because if you are resilient that enables you to take risk that enables you to be on the front foot and when bad things happen you can actually go on offense rather than just be defense and I think that's the mindset we've got at Citi. How do we be a source of resilience for the system and for our clients both financially as well as operationally? And I know Javier many of the same conversations we've been having with Swift.
Totally. I mean it's front and center for us as we said we cannot think about the future. Yeah. Yeah, we don't have this. And as you were saying, you know, just look at the numbers you were putting up on you were talking about on stage there, how quickly you are moving money around the world and how just the speed that you're talking about is seconds everywhere. And exactly as you said, resilience and trust go hand in hand when you're operating at that speed. It's pretty cool.
Well, and I have to say that what you're saying on shifting trading patterns, we see it as well on our network because despite these changes traffic continues to be pretty strong. So globalization is indeed reshifting. So given that landscape, what are global corporates, how do from your perspective now of course seeing so many customers are looking for from banks like Citi as they prepare for the future and what do you see are the biggest competitive threats?
Look I think that's really the most important question because there are a lot of shiny objects that are being built around in this space at the moment and there's a lot of hammers in search of a nail. And I think our industry's responsibility is to understand what is it our clients need. And that's I think certainly from Citi's point of view, we're not in the business of shiny objects. We're like what are the clients issues and how do we solve them? And then many of the things that Dan was talking about, you've talked about clients want always on. So 365 they you know none of this 9 to 5 anymore. Then they also want it to be instant as you've talked about, safe. Right? It's got to be trusted and it's got to be something that is incredibly efficient on the balance sheets and I'm sure we'll get into interoperability in a moment or two, but building up all of those different capabilities is something that's vital and it's also merging the traditional rails with the new digital and the new digital assets and the AI worlds and how do we all get it to work together? Our clients want this to be as uncomplicated for them as possible. They don't they want a world where they're not worried about how the plumbing is working. They want to make sure it's as seamless, as easy as possible. It's one of the reasons I love tokenization because with tokenization, we're taking the existing client accounts, moving money on the blockchain in digital deposits, and now we've linked it into our Citi Token Services and tokenization is such a wonderful capability because of the programmability that comes with it. So you start solving these different pain points for clients creating new capabilities that weren't there before. And that's a lot of what we're trying to do. We've just added the UAE and Japan to Citi Token Services. And that's both in dollar and euro in those markets. And that's added two more markets to five existing major centers in which we're able to move money instantaneous always on on the blockchain. So with all the benefits of programmability and then linked it into our 24/7 clearing. So we're still waiting for the central banks to make sure that they can also operate 24/7 so that we can move money around the world in line with the payment system. I'm sure that's coming. I'm certainly nagging them to do so quickly. But you can see where the world is headed and for clients efficiency, security being absolutely critical, always on, instant, interoperable, that's where we're moving.
Yeah. No. And well, clearly you've I mean give you credit as well because you've been doing a lot of impressive work on the
I wish I could take the credit. It's a wonderful team. They've been working on it for many years now. And it's also good because we're starting to see the client appetite build. Your point on blockchain. I remember giving a presentation or and being in part of it 15 years ago on blockchain to our board and the client adoption's been very slow and it feels like we were beginning to hit this inflection point which is exciting for the industry.
Totally. And it's part and we're seeing this direction and you mentioned the central banks. We're going to see, as Dan mentioned, a lot of talk about it because there's a lot of progress there as well.
Yes. All talk, no trails as I like to see the action. Yes.
I can do the one in Spanish as well, but we won't go there.
Yeah. Yeah. Maybe at the end of the chat, we go into the Spanish.
So actually on this point on tokenization it's true that there are many initiatives going on there are many different players public sector private sector highly competitive firms incumbents so there is a risk the famous risk of fragmentation and so as we project forward you mentioned that you wanted to talk about and I know it's close to your heart interoperability what's your take?
I mean I look at it as a bank CEO we have a massive massive tech spend to 12 billion dollars a year which is a mind you know and you never have enough and for me if I don't have interoperability it's just so painful because there are these wonderful new capabilities and you think of them all they are all wonderful in of themselves and alone but alone is the problem. We need everything to work together and you don't want it to be the lowest common denominator where everything you know it is an interoperable and great standards but they're actually each piece isn't good enough. So again how do we get the connectivity and the interoperability is absolutely critical for achieving the scale for the capital markets and for all of the different dimensions we're talking about. And I look at an analogy. Think of the railroads when they were first developed. You know, here in the States, I grew up part of my life in Australia. Same thing across the country. Even Europe today, the different gauges mean that the trains couldn't go across the country. You had to move all of the things off individual rail systems onto a different one. That meant unloading and offloading cargo. I mean it's just a nightmare. And so getting this interoperability, getting common standards, more harmonization enables us to have the scale. And at the end of the day, that's the big benefit I think the US and China have is the scale of the markets that we're working in. And one of the challenges of our old home market in Europe that fragmentation is a problem. So driving to interoperability has to be the name of the game. And that's again the mindset we have at Citi and I'm sure it is in many other institutions. It's a bit like Amazon. You don't just want to have your own proprietary product. You want to be buying third party product on all the different retail platforms. And we want to be doing the same. We want to make sure that we're connecting all the different capabilities for our clients. And I just met with Lloyd's of London. My old boss is a chair there. And they were celebrating, you know, their hundred years. What we have been doing and working with them throughout all their history is it's linking the trade, it's linking the foreign exchange, it's linking their cross currency needs, it's moving money around the world, it's their liquidity, the whole lot is going in one place, different capabilities, interoperable data at the center.
Totally. Yeah. Oh, and anyway, it speaks to many of us here at Swift, but many of us here in our community. Interoperability is the name of the game. That's what we do. Yeah.
At the end, it's not about having a single platform, but it's about making sure that we take the best of every jurisdiction and every technology.
