Following several pilots earlier in the year, Citi has launched a digital bill of exchange product as it works to eradicate paper-based processes and slash turnaround times for trade finance clients.
This week, the international bank released its Citi Digital Bill (CDB) solution and said it would enable suppliers to monetise their receivables in less than an hour, down from weeks previously.
The product is an alternative to traditional paper-based bills of exchange, and initially, will be offered to customers in the US, Ireland and the UK through the bank’s receivables finance platform, CitiDirect.
Parties involved in a transaction – including the seller, buyer and bank – will be able to sign, accept, endorse and finance the digital bill.
“CDB significantly reduces complexity by eliminating the need for physical documents and couriers and the movement of paper across multiple parties in different geographies,” Citi says in a statement, which also highlights the security benefits and faster access to working capital for companies.
“The launch of Citi Digital Bill is a significant advancement in trade finance, marking a groundbreaking shift away from long-standing paper and the wet ink-based practice of discounting bills,” says Sanjeev Ganjoo, global head of trade receivable finance at Citi Services.
Citi is planning to release the product in additional countries in 2024, subject to necessary approvals.
The launch comes after “several pilot tests” were conducted on Citi’s receivables platform earlier this year, including with companies in the technology, media and telecommunications sector, a bank spokesperson says.
They tell GTR that a significant volume of transactions has already taken place this year and that “multiple clients” have already transitioned their paper bill discounting to Citi’s Digital Bill solution.
“We see enormous interest from companies across industries and geographies to use CDB in the near future,” the spokesperson says, noting over US$6bn of throughput has already been processed under the product.
Citi developed the solution on its own proprietary platform without a technology partner, they add.
In a statement, the bank notes CDB is not a negotiable instrument and is structured under contract laws.
There has been a growing push for corporates to use digital negotiable instruments (DNIs), which are usually electronic bills of lading and bills of exchange, for international trade transactions.
Earlier this month, Lloyds Bank and fintech Mercore began using DNIs and said the deals were the first of their kind to be completed between two financial institutions. The transactions were for the shipping of sugar from the Americas to the UK.
