Citi is making progress in its tech transformation, innovating with stablecoin while streamlining operations. 

The $1.7 trillion bank is making “investments that enhance the competitiveness of our businesses,” Chief Executive Jane Fraser said during the bank’s second-quarter earnings call today. “We aim to deliver the benefits of advancements in stablecoin and digital assets to our clients in a safe and sound manner by modernizing our own infrastructure.”

The New York-based bank is exploring issuing its own stablecoin to fully use the capabilities of the tech, Fraser said, adding that stablecoin reserve management and cash-to-coin convertibility — and vice versa — are other areas of focus. 

Stablecoins will “grow new revenue streams for us and also allow us to acquire new clients,” Fraser said. 

Citi’s stablecoin arm, Citi Token Services, launched in September 2023, and allows clients to make cross-border and cross-currency transactions. It is live in the United States, the United Kingdom, Hong Kong and Singapore, Fraser said, adding that the platform “has processed billions of dollars of transactions since its launch in market.” 

Financial institutions, big retailers and digital asset providers will work together to develop stablecoin infrastructure since it is still uncertain “whether the issuance of stablecoins in and of itself has a significant value proposition or should be viewed merely as a utility,” according to the Bank of America Global research report, “U.S. Bank: On Chain,” published July 13. 

JPMorgan became the first U.S.-based $1 trillion bank to issue its own digital token (JPMD) in June on the heels of clearer regulatory guidance provided by the Genius Act. 

The Genius Act passed the U.S. Senate last month and failed an essential vote by 196-233 in the House of Representatives today. 

THE BIG PICTURE: While developing new tech, Citi is remaining steadfast in streamlining operations by investing in AI tech to “drive automation and reducing touch points” and continuing its multiyear transformation journey, Fraser said. 

Nearly 740,000 automated code reviews were conducted through its gen AI tool, Citi Squad, during the quarter, up 236% year over year, saving its 30,000 developers 100,000 hours each week, Citi reported. 

According to its earnings report, Citi’s tech transformation strategy includes: 

• End-to-end risk management lifecycle; 

• Compliance risk management framework; and 

• New financial forecasting engine for financial stress metrics. 

“The investments we have made are improving our risk and control environment,” Fraser said. “We are confident that our transformation expenses will start to decrease next year.” 

The bank spent $2.9 billion in 2024 on transformation efforts, which will start yielding results in 2026, according to a Bank of America Global Research report published on July 9. 

BY THE NUMBERS: In Q2, Citi reported: 

• Revenue of $21.7 billion, up 8.2% YoY; 

• Technology and communication expenses of $2.3 billion, up 2% YoY;  

• Active digital banking users of 27 million, up 5% YoY; 

• Active mobile banking users of 20 million, up 8% YoY; 

• Net interest income of $15.2 billion, up 12.5% YoY; and 

• Net income of $4 billion, up 25% YoY. 

NOTEWORTHY: The bank is also looking to shut down operations in Poland by the end of next year as its last divestment, Fraser said. 

Since Fraser took the helm in 2021, Citi has exited many non-core geographies including China, Canada and India in a push to streamline operations, according to Bank Automation News’ prior reporting. 

FLASHBACK: The bank is also digitalizing its commercial lending operations and is working with fintech Validis to service existing loans through AI tech. 

The new digital platform can process loan applications in 15 business days and disburse money in 30 working days, which Citi believes is on par with or lower than industry average, Colm Donnelly, head of digital lending transformation and partnerships for Citi Commercial Bank, told BAN. 

FUTURE LOOK: According to an HSBC Global Research report published today, the investment bank has maintained a buy rating of the stock on the heels of rising guidance for 2025 by the bank. 

HSBC expects a price-to-equity [PE] ratio of 12.3% in 2025, down from 14.9% in 2024. 

MARKET REACTION: Shares of Citi (NYSE: C) were down 3.69% at market close today to $90.78. BNY has a market capitalization of $169 billion.

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