Citi Ventures remains focused on investments that generate both strategic and financial returns, prioritizing long-term value over short-term fluctuations.

The venture arm of $1.7 trillion Citi monitors market volatility closely, but its core mission is identifying and backing sustained, strategic value regardless of short-term market fluctuations, Jeff Flynn, director for venture investing at Citi Ventures, said today during the Bank Automation News webinar “Emerging fintechs: New technologies you need to know now.”

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“Our mission is to bring innovation that occurs externally into Citi for the benefit of Citi and our clients,” Flynn said.

Key areas of focus for Citi Ventures include:

• Core banking;
• Capital markets;
• Wealth management;
• Enterprise software;
• Payments; and
• Lending.

“An example that we spend a lot of time on is embedded lending. Lending is a major center of profits for banks.”

— Jeff Flynn, director for venture investing, Citi Ventures

There are scenarios where a customer — business or consumer — is using a particular platform that already has the necessary information to underwrite a lending product. While the platform might not want to be a lender or might lack the capability, it can partner with embedded lenders, Flynn said.

“Those embedded lenders benefit from lower distribution costs because they’re already seeing their customers and potentially [have] better underwriting,” he said.

While Citi and its venture arm take a cautious approach to AI deployment, generative AI stands out as a cross-cutting trend, improving capabilities that are transforming multiple areas simultaneously, Flynn said.

“Across all those categories, there are compelling areas of innovation,” Flynn said, adding that generative AI could be used to enhance multiple areas.

For example, Citi Ventures in March participated in an $87 million fundraising round by one of its portfolio companies, Norm Ai, which uses gen AI to automate compliance, Flynn said. Norm Ai’s solution streamlines creation of required marketing disclosures, a tedious task for banks, he said.

“Anyone who’s been watching this trend would probably agree that it’s going to change the way we all work and the way our companies interact with customers,” Flynn said.