Citigroup has added 8,000 people in its technology function over the past 12 months as it ramps up an ambitious digital transformation programme, hiking IT spending by 12% in Q1 2023 and slashing app numbers.
Recent successes include the retirement of 20 trading platforms to consolidate around one, an ongoing process to move 39 loan servicing applications to a single platform, and deeper use of public cloud for “faster market risk calculations, data sharing, and instant payment”, according to Citi’s Q1 2023 earnings presentation on April 15.
It also continues to make “continued data enhancements to achieve greater consistency, accuracy, timeliness, and completeness of data” and continues to work on improving digital onboarding processes, the bank said, reporting net income for the quarter of $4.6 billion, up from $4.3 billion in Q1, 2022. Total Q1 expenses were $13.3 billion.
Citi digital transformation: COO in charge as CAO retires
Chief Financial Officer (CFO) Mark Mason said on an earnings call: “Across the firm, technology-related expenses grew 12%. 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.”
(By “consent orders” he was referring to demands made by regulators to improve controls across the bank, after the Federal Reserve in 2020 said the bank had to “enhance its firm-wide risk management and internal controls” adding that “the firm has not taken prompt and effective actions to correct practices previously identified by the Board in the areas of compliance risk management, data quality management, and internal controls.”)
See also: A $1bn fat finger helps drive Citi’s $13.6bn IT spending plans
Whilst major technology companies have haemorrhaged staff in late 2022 and early 2023 (Amazon alone has laid off 27,000 and Microsoft 10,000), banks and other employers including defense and aerospace firms remain keen to secure technology talent in what is now something of a buyer’s market, CIOs and CISOs tell The Stack.
The investment banking giant clocked in a revenue of $19.73 billion in the quarter ending March 2023 but noted technology overhaul as an ongoing major expense for the firm. Citigroup plans to spend $54 billion in 2023 on an ongoing transformation as it overhauls data, risk, and technology processes and infrastructure, earlier telling investors that “approximately 25% of the investments… are related to technology” as CFO Mark Mason put it to investors earlier this year. The figure means Citi technology spending will hit around $13.6 billion in 2023.
(With regard to last year’s progress, Citi’s Technology and Operations lead Stuart Riley said as of 2022 his teams had migrated around 25% of applications to a containerized architecture, served around eight billion API calls across 300 APIs and were now employing some 30,000 software engineers, per a 2022 investor day event.)
Whilst the bank hired Karen Peetz as CAO to handle the Citi digital transformation and broader change management programme in 2020, she is now retiring and CEO Jane Fraser said that COO Anand Selva (a Citi veteran who was most recently CEO of its Personal Banking and Wealth Management segment) has been asked to “take on running our enterprise-wide transformation program, in addition to his current responsibilities.”