Dive Brief:
- Citigroup added 8,000 technologists to its transformation workforce, according to last week’s Q1 2023 earnings results presentation. Now, more than 12,000 employees are dedicated to the financial services company’s overhaul.
- As part of an ongoing modernization push, technology-related expenses grew 12% year-over-year for the three-month period ending March 31, CFO Mark Mason said during the financial services company’s earnings call last week.
- “These investments will simplify our processes and platforms,” Mason said during the earnings call. “We’re driving the strategy by investing in the client experience, both in terms of our technology interface and innovative new products.”
Dive Insight:
Citigroup’s transformation agenda encompasses data enhancements, platform consolidation, leveraging cloud to connect front-office systems to general ledgers and retiring legacy systems.
To simplify operations, the company 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.
Citigroup isn’t new to modernization. The company budgeted $11 billion for technology last year, a 30% increase compared to 2020, Karen Peetz, the company’s chief administrative officer, said in a letter to investors last year. The company boosted tech spend 14% in Q2 2022.
The investments were in part a response to a consent order issued by the Federal Reserve Board in 2020 requiring Citigroup to “enhance its firm-wide risk management and internal controls” in areas related to compliance risk management, data quality management and internal controls.
“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 during the earnings call.
Anand Selva, Citigroup’s COO, was tasked with leading the company’s transformation program after Peetz announced her imminent retirement last month.
