Citibank is investing in technology and automation to modernize its security infrastructure, enhance client experience and improve its data structuring. 

“We’re deep into the large body of work of automating manual controls and processes, consolidating fragmented tech platforms and upgrading our data architecture,” Jane Fraser, chief executive at Citibank, said today during the bank’s third-quarter earnings call. 

“We’re committed to doing this the right way, knowing it will take time to meet our regulators’ expectations and to deliver a modern, more efficient infrastructure.” 

The $1.7 trillion bank added nearly 6,000 employees to its tech department in Q3 and increased technology-related expenses 8% year over year to $2.1 billion, according to the bank’s supplements. 

THE BIG PICTURE: Banks across the board have been increasing their tech spending to improve their infrastructure and provide better services to customers. 

JPMorgan Chase saw its tech spending increase 7% YoY to $8.5 billion in Q3, while Wells Fargo increased tech spending 22% YoY to $975 million. 

New York-based Citibank plans to reduce headcount as technology, automation, and streamlining improve the bank’s efficiency, Chief Financial Officer Mark Mason said during the call. 

“We’re going to realize efficiencies that come out of headcount reduction,” Mason said. “We’re investing and hiring on the front end to capture the upside as markets turn, but also as we position ourselves to grow with clients.” 

BY THE NUMBERS: In Q3, Citibank reported: 

• Net interest income of $13.8 billion, up 10% YoY; 
• Active mobile banking users stood at 19 million, up 10% YoY; and 
• Operating expenses of $13.5 billion, up 6% YoY. 

NOTEWORTHY: The bank sold its wealth business in China to HSBC for $3.6 billion as part of restructuring, which includes exiting 14 markets — India, Australia and Taiwan among them. 

In March, Citibank sold its consumer banking business in India for $1.3 billion to Axis Bank and sold operations in Taiwan to DBS in August.

Citibank expects to close the sale of its consumer banking operations in Indonesia in the fourth quarter as it continues to simplify the organization, Mason said.

FLASHBACK: In August, Citi teamed up with Edward Jones to provide bank accounts to the wealth management firm’s clients. The BaaS offering helps Citi gain deposits in a year when deposit growth has been difficult to come by.

FUTURE LOOK: Citigroup is investing in AI to gain efficiencies while consolidating operations. The bank is exploring AI to make use of unstructured data like emails, contracts and regulatory documents, Prag Sharma, global head of AI at Citi, told BAN.

Citi Ventures, the venture capital arm of Citi, pivoted this year to invest in early-stage startups while keeping a view of company growth over the next five to eight years.  

MARKET REACTION: Citibank’s stock was up 0.22% at 4 p.m. today and was trading at $41.44. 

[stock_market_widget type=”inline” template=”generic” assets=”C” markup=”{name} ({symbol}) is trading at {price} ({change_pct})” display_currency_symbol=”true” api=”yf”]