Dive Brief:
- Citi added 8,000 technologists to its transformation workforce over the past year, according to last week’s Q1 2023 earnings results presentation. Now, more than 12,000 employees are dedicated to the bank’s overhaul.
- Technology-related expenses grew 12% year-over-year for the three-month period ending March 31, CFO Mark Mason said during Citi’s earnings call last week.
- “These investments will simplify our processes and platforms,” Mason said. “We’re driving the strategy by investing in the client experience, both in terms of our technology interface and innovative new products.”
Dive Insight:
Citi’s bulked-up tech headcount lends credence to its announcement last June that it intended to hire 4,000 tech employees to move its institutional clients online.
Mason last year said the bank needed to offset “past underinvestment in our businesses.”
That, in itself, marked a reference to Citi’s multiyear effort to address its 2020 consent order from the Office of the Comptroller of the Currency, in which the agency demanded “the thorough redesign” of the bank’s “data architecture, re-engineering of processes, and modernization of system applications and information technology infrastructure that … maximize[s] straight-through processing and minimize[s] manual inputting and adjustments.”
Citi has taken to calling the effort its “transformation,” encompassing data enhancements, platform consolidation, and leveraging cloud to connect front-office systems to general ledgers and retiring legacy systems.
Citi has consolidated 20 cash equities platforms into a single, global system to improve client experience and reduce costs, according to Mason.
“We’re also modernizing our infrastructure and the security of our data and information by enhancing cybersecurity through the use of AI and improving the security of our infrastructure and devices, leading to fewer operating losses,” Mason said.
Citi budgeted $11 billion for technology last year, a 30% increase compared with 2020, Karen Peetz, the company’s chief administrative officer, said in a letter to investors last year. Peetz announced her imminent retirement from the bank last month, leaving Citi COO Anand Selva tasked with leading transformation effort.
“We recognize these investments have driven a significant increase in expenses, but they are crucial to modernize the firm, address the consent orders and position Citi for success in the years to come,” Mason said last week.
