- Citigroup poured $3 billion into tech modernization in the third quarter of 2023, CEO Jane Fraser said Friday, during the bank’s quarterly earnings call.
- The 8% year-over-year increase was driven largely by “investments in product development, platform enhancements and improving the client experience,” said Fraser.
- Citi’s digital transformation is ongoing. The bank also spent $3 billion on tech last quarter, and another $11 billion in 2022. “At the end of the work, we will have a simpler firm that can operate faster, better serve our clients and unlock value for our shareholders,” Fraser said.
Operational simplification emerged as a key goal of Citi’s modernization.
“Our transformation and technology investments span the following themes: platform and process simplification, security and infrastructure modernization, client experience enhancements and data improvements,” CFO Mark Mason said.
The company has retired nearly 300 applications this year, according to the Q3 earnings presentation, and automated preventive controls across nearly 80% of its high-priority payment systems. Approximately half of the data infrastructure the bank uses for transactional flow related to prioritized products has been rearchitected, as well, the report said.
After initial hesitance to migrate to cloud, the risk-averse banking sector has doubled down on modernization to improve efficiency, generate operational savings and drive revenue growth. The need for enhanced security and resilience are drivers, too, the U.S. Department of the Treasury stressed in a February report on cloud adoption in financial services.
Citi said tech enhancements have already cut stress-testing calculation time in half. The bank is looking to automation for additional gains.
In management reporting, the company is automating processes, eliminating duplication and centralizing governance in order to scale data operations, reduce organizational complexity and speed decision-making, Fraser said.
“We're deep into the large body of work of automating manual controls and processes, consolidating fragmented tech platforms and upgrading our data architecture,” said Fraser. “Transformation remains our number-one priority.”