Dive Brief:
- Citigroup armed 30,000 developers with generative AI coding tools as part of an ongoing modernization push, CEO Jane Fraser said, speaking during the bank’s Q4 2024 earnings call Wednesday.
- The bank spent $11.8 billion on technology in 2024, investing in digital innovation, product development, client experience and cybersecurity, CFO Mark Mason said. Citi invested an additional $2.9 billion in transformation initiatives, including infrastructure, platforms, applications and data, according to Mason.
- “The investments we're making to modernize our infrastructure, streamline processes and automate controls are changing how we run the bank,” Fraser said, pointing to a cloud-based risk analytics solution and two generative AI productivity enhancement platforms the bank deployed to 143,000 colleagues last year.
Dive Insight:
Citi has steadily beat the modernization drum for the last three years, retiring 2,000 legacy applications in the process.
The bank’s tech spend surged north of $11 billion in 2022 and reached $12 billion in 2023 before last year’s modest 2% decline. Investments in transformation increased 4% to $2.9 billion in 2023 and remained at that level last year.
“We all want transformation to get done quickly and we want it to get done right,” Fraser said.
The push comes in the wake of what Fraser characterized as decades of historic underinvestment in Citi’s infrastructure and risk and control systems. The urgency was triggered by a 2020 Federal Reserve Board enforcement action tied to poor data quality management and $135.6 million in penalties levied by regulators last year.
“While there are areas that are more advanced, there are others where we still have a lot more work to do, particularly around data and regulatory reporting as last summer's regulatory actions reinforced,” Fraser said. “We have reviewed the entire data program and made changes to its governance and structure as well as increased the level of investment.”
Technology lies at the heart of banking as the industry’s biggest players leverage massive data estates to fuel generative AI initiatives and broader digital transformation.
Data is an area where Citi has more work to do, Fraser acknowledged, noting the bank increased investments last year to “expand the scope and accelerate some of the work to satisfy our regulators' expectations.”
As remediations progressed, Citi consolidated four activity risk management platforms down to a single platform, launched a regulatory reporting platform and deployed an AI-assisted data management tool. The bank tapped Google Cloud for AI and analytics in October and rolled out the Stylus document intelligence and Assist virtual assistant AI tools to its workforce in December.
Despite elevated tech spend, Citi reported net income of $2.9 billion for the fourth quarter, compared to a net loss of $1.8 billion during the same period last year. Net income for the year went up nearly 40% to $12.7 billion.
“We are continuing to invest in order to achieve what we need to get done here and also ensure the businesses have what they need to drive sustainable growth going forward,” Mason said.
