Dive Brief:
- Citi touted AI productivity gains as it moved forward with ongoing IT transformation last week during the company’s first-quarter earnings call. “I’m not sure any bank finishes its modernization,” CEO Jane Fraser said. “We’re still innovating and investing in supporting our business with new innovations.”
- The bank poured $2.4 billion into technology and communication investments during the first three months of the year, up from $2.3 billion in each of the prior two quarters and $2.2 billion in Q1 and Q2 2024, according to the earnings presentation.
- Citi retired or replaced 130 applications during the quarter, on top of 2,000 legacy applications decommissioned over the past three years. The bank also saw efficiency gains after deploying two internal chatbot assistants, as well as a developer tool that completed roughly 220,000 automated code reviews, according to the presentation.
Dive Insight:
IT system upgrades and generative AI adoption have gone hand in hand across the financial sector, as banks look to ease internal operations and smooth customer interactions. Citi’s modernization push was also motivated by compliance imperatives.
The Federal Reserve found deficiencies in Citi’s data quality management in 2020, which triggered $135.6 million in regulatory penalties last year.
Fraser has been blunt about the prior state of Citi’s data infrastructure. The executive pointed to decades of underinvestment shortly after the Fed and the Office of the Comptroller of the Currency levied the 2024 fines.
“We fell behind in data, particularly regarding regulatory reporting,” she said Tuesday. “We’ve taken action to get that into shape, and we’re confident in how that’s now progressing.”
Citi’s data system investments are part of a broader transformation aimed at upgrading digital systems and simplifying processes across banking operations.
“There’s still work to do,” Fraser said, pointing to ongoing efforts to retire legacy applications and consolidate Citi’s technology onto unified platforms. “Many of the efforts are now impacting how we run the bank better and more efficiently.”
Data quality assurance is a crucial step along the road to the safe and effective implementation of AI capabilities.
Citi provided 30,000 of its developers with coding tools and tapped Google Cloud’s Vertex AI platform for further adoption last year. Last month, the company announced that former Morgan Stanley data and AI executive Dipendra Malhotra will join the bank’s wealth management unit as head of wealth technology in May.
The bank recruited former PwC senior partner Tim Ryan to head technology and business enablement and drive enterprisewide AI adoption last summer. Citi furnished employees with several generative AI tools designed to help with routine tasks in December, Ryan said in a LinkedIn post.
"We are also integrating AI directly into our business operations to improve the client experience,” Fraser said last week. “The latest example is Agent Assist, our first generative AI tool for customer service in U.S. Personal Banking. It is designed to help our team resolve inquiries faster and is now being piloted in credit cards."
