Citi plans to spend $11 billion on technology this year, an 11% year-over-year increase.
“This year, we’ve budgeted approximately $11 billion, which is a 30% increase compared to 2020,” Stuart Riley, head of Institutional Client Group (ICG) technology and operations, said recently during Citi Investors Day 2022, which was referenced during the bank’s first-quarter earnings call today. “That spend is split roughly equal between changing the bank and running the bank activities.”
The $2.3 trillion bank reported Q1 revenues of $19.2 billion, a 2% decline year over year. Net income was $4.3 billion, down 46% YoY. Q1 technology and communication spend was $2 billion, up 9% YoY but down 3% sequentially.
While information regarding technology was sparse during today’s earnings call, the Investor’s Day transcripts provide a glimpse into the bank’s tech strategy for the coming year — including why it will spend more.
A focus on digital platforms
The bank has focused on digitizing platforms with Citi Velocity, its digital platform for access to Citi’s capital markets services, and its mobile app CitiDirect, Chief Executive Jane Fraser told investors. But there are other areas where the bank has under-invested, including data architecture, automating operations and simplifying end-to-end processes, she added.
“The work we have underway to make these upgrades will benefit Citi, giving us an automated, controlled and lower risk environment,” Fraser said. “It will benefit our clients, too, because we’ll get higher-quality products to market more quickly, and our clients will have a better and easier user experience.”
The bank has increased its technology headcount by 30% during the past two years, bringing its total number of software engineers to more than 30,000, Riley, of ICG, said.
“It’s worth me mentioning that two-thirds of our revenue growth in the next few years is driven by businesses that are fundamentally dependent on the technology implementations,” Riley told investors. Technology underpins other goals the bank has around transformation and strategy, he added.
New instant platform for digital commerce
Also during Investors Day, Riley introduced Payments Express, a new cloud-based, application programming interface (API)-enabled platform that targets digital commerce clients. Payments Express began running earlier this year with plans to go live in two major markets in 2022, he said.
“We will be delivering a platform that will increase our payment capacity by over 100 times,” Riley said. “It will also be the fastest time to market of a substantial client offering.”
More than 300 APIs
Citi uses the public cloud, including running “millions of hours of risk calculations in our markets business” on Amazon Web Services, Riley previously said. Investors Day transcripts also reveal that Google is a client of Citi’s Treasury and Trade Solutions division.
“It’s worth noting here that 25% of all of our applications in the ICG have already been migrated to a containerized architecture,” he said. “That means they’re ready to be deployed on any cloud environment we choose.”
The bank has more than 300 APIs deployed across Citi platforms, which were leveraged in about 8 billion API calls in 2021, Riley said.
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