Dive Brief:
- Citigroup poured $3 billion into tech modernization during Q2 2023, an increase of 13% year over year, CFO Mark Mason said during a Friday earnings call for the three-month period ending June 30.
- The financial services company has moved from planning to implementing tech upgrades and new tools. “We're investing in the execution of our transformation and continue to see a shift in our investments from third-party consulting to technology and full-time employees,” Mason said.
- Citi added 7,000 tech-related jobs in Q2, according to Friday’s earnings statement, bringing the total number of new positions to 13,000 this year, Mason said. The company added 8,000 tech positions during the first three months of the year.
Dive Insight:
Citigroup, the third-largest domestic commercial bank, is reaching an inflection point in a multiyear digital transformation journey and anticipating returns on costly tech investments.
“We remain committed to bending our expense curve by the end of ‘24,” CEO Jane Fraser said during the earnings call, pointing to expected material benefits from tech investments in the medium term.
As evidence of progress, the company launched a digital commercial banking platform last week, consolidating various client services onto a single interface.
However, Citi’s Q2 revenue declined by 1% year over year. Net income also fell 36% compared to the same period last year. In June, the company cut 1,600 non-tech jobs, bringing the total number of layoffs, largely in banking, markets and functions, to 5,000 this year.
In addition to platform enhancements, Citi’s broad modernization strategy encompasses infrastructure resilience and security, automation tools and CX technologies, Fraser said.
“We're managing that cost very tightly,” Mason said. “We're constantly looking at opportunities to deliver on those transformation deliverables more efficiently, leveraging more technology, leveraging AI in some instances.”
