Citi unveils 7-day sweeps – Traders Magazine
Citi has launched a new cash concentration capability designed to mobilize and concentrate liquidity seven days a week.
This new offering is available to Citi institutional clients, a Citi spokesperson told Traders Magazine.
“We are seeing demand for seven-day scans across our customer base, but particularly from fast-growing, high-growth tech and e-commerce companies,” a spokesperson said.
Changing consumer behavior, increased use of instant payments and the proliferation of new e-commerce models are moving cash management towards real time.
Cash concentration is a business cash practice that involves the transfer and sweeping of funds from multiple accounts to a single account to optimize the use of available funds for business expenses or investments.
At Citi, institutional customers use wire transfers to automatically transfer cash balances between accounts held at Citi branches based on pre-established parameters or instructions for periodicity, timing, and amount.
Historically, automated scanning of funds between accounts in a client’s cash management pools has not run on weekends and holidays, creating an inconsistent cash concentration experience.
During these periods, funds should be transferred manually, ensuring sufficient liquidity to mitigate the payment of overdraft fees associated with increased credit usage caused by payment activity on non-business days or after business hours.
“The growing proliferation of instant payments and other 7-day-a-week operational activities is causing liquidity levels to ebb and flow, which means that cash concentration structures must be able to respond quickly to these fluctuations,” said said a Citi spokesperson.
Citi’s 7-Day Sweeps solution is designed to meet this need by extending automated negative balance funding and positive balance centralization to non-business days, helping to reduce risk, increase efficiency, and optimize liquidity throughout the year, added a spokesperson.
Citi 7-Day Sweeps is being rolled out in a phased approach, initially focusing on key cash and cash concentration centers ensuring real-time payments.
Citi has enhanced its Global Concentration Engine platform, with new features for this upgrade and will continue to invest in technology to help ensure a consistent customer experience globally.
The offer is now available for national cash concentration structures in the United States and South Korea, with plans to expand into other markets.