Inside Citi's Road to Renewal

Hi Jane. Hello Claire. How are you? I'm good. Thanks for joining us through the magic of technology. I'm really happy to have you. I wish I could be with you in California. It sounds a lot more fun than raining in New York. That's for sure. We're having a great time and so thank you so much for being here. Ellie covered a little bit of this in your intro but I wanted to go back five years to when you first got the job at Citi. The bank had long trailed Wall Street rivals on profitability and it hadn't fully shed its reputation. as this kind of bloated financial supermarket. It was one of the most daunting turnarounds on Wall Street, if not in all of business, and you were the woman for the job. When you're taking on an assignment of that magnitude, just give us a sense of where did you start? Look, I think you start with the basics, which is you start with a forward-looking view of the company, what does it need to be. And so I spent some time talking to all different stakeholders, So shareholders, employees, customers, competitors, and got the good, bad, and ugly feedback. And from that, I got a real sense as to where it was the bank could really differentiate ourselves and who we should be, and then by default, what we shouldn't be. And everything really built from that vision. Citi is a very global bank. We operate in 180 countries, on the ground in almost 100. And that's quite unique. And so it was building off becoming a partner for clients who have a bank with a global reach and that we would be the partner for them, but we wouldn't be all the other things that we were. And so a lot of selling in the first year. Right. And deciding what you're not going to be required a lot of tough decisions. I mean, you flattened management, you restructured the bank, you exited retail banking in 14 markets. and by the end of this year, Citi will have eliminated 20,000 jobs. This spring, you told me that there's a difference between making tough decisions and being an asshole. Those were your words. Yes. I think I said asshole because I've still got the British accent. Yes, of course. How do you strike that balance, and how do you ensure that employees, maybe some of the folks that, unfortunately, you have to cut, how do you ensure that they feel the difference? Look, I learned when I ran our mortgage business and I had to do restructuring. It was the first time I'd done a big restructuring. And I remember standing thinking, how am I going to communicate what we need to be doing to people? And this is where I always talk about empathy. Put yourself in the audience or put yourself in the other person's shoes. And I remember thinking, how, if I'm an employee in that business, how would I want to be told about what's coming ahead? and i would want to be told straight i i would want to know like what is the hard truth just tell me what it is and then tell me what you're going to do to help me either find another position or manage to manage through this and and i've always found that that's been a sort of a guiding sentiment for me is okay if i was in the other person's shoes what would i want to be listening to? How would I want to hear this? And straight is usually the answer there. And you do not have to be tough and unpleasant about it, but you do have to be straight. And so some of your efforts are really starting to pay off in big ways. Yesterday, Citi posted its highest third quarter revenue in a decade. It's one of the top performing bank stocks this year. Last year marked the bank's highest revenue since 2010. Where do you see Citi in the lifespan of this turnaround, and what comes next? Well, we're definitely in the more fun part of everything that's going on. We've got a lot of the heavy lifting behind us, and now what I've said to the firm is if we are going to be the best in the businesses we're in, we have to beat the best, and so it's that mindset of excellence, and that's the next phase of the journey. We've still got a few things to get done on getting things into the right shape, but so much of the energy of the firm, for a while now, has very much been on the front foot. And I do tease that one of the strengths of women is multitasking. We've done a lot of multitasking as a bank. We've been growing at the same time that we've been restructuring, we've been fixing things at the same time we've been innovating. So it's been tiring, but now it's great because so much of the energy is about moving forward. Just as the world is getting a little bit more crazy and definitely the need to be innovating and having as much of your energy to think and to help drive things forward, I think our timing has been good. Right. Yesterday you talked about preparing for, I mean, speaking of innovation, preparing for Citi's AI-driven future. I'm guessing that future is still taking shape, but can you talk about maybe one or two of the biggest ways you see AI changing how Citi does business? Yeah. Look, it's a very exciting technology that's unleashed, and it can help you earn money, it can help you save money, it can help you secure the bank. And for us, I think what will stay the same is trust. You often talk about move fast and break things. We have to move fast and retain trust. And that's really important as a bank. And so with that sort of sentiment, we look at how do we innovate. We've got, I remember the first time we have an effort with Google, with DeepMind and Demis, who's a really brilliant person. and that team helped us come up with a new team member so it's not a replacement team member but it's a new team member in wealth um and it's a AI avatar um agent um it looks and sounds like a human being um you talk to the person um and they respond back to you and they can read your emotions they can see how you're reacting but they work at 10 o'clock at night um when our bankers hopefully are getting some beauty sleep and they're able to interact with clients at the time that the team's not able to with all the information and everything that is needed so these are some of the exciting ways that I can see us growing as a firm and indeed multiple industries will be growing by adding new things on that we weren't able to do before but in a way that still augments human beings rather than replaces us. That's our intent and our expectation. Right, you kind of hinted at my next question, which is going to be about headcount. Do you see it remaining steady as you make this shift towards your AI future? Honestly, we don't know yet because there's going to be puts and takes. So there's going to be new jobs created. There's going to be new revenue lines created. There's going to be more growth. There's going to be some jobs that go away. because they're getting automated more rather than just ai it's a combination of ai and automation and then there are other other jobs that will change and i i think we we know everything will change somewhat from this um but the the timing of the puts and takes is what we don't know as well but i i think one of the one of our principles is how do we make sure that all of our people I get trained in how to use AI, how do they use it themselves at work safely in the support of our clients and making our bank better, our products better, but not doing it under that fear that they're hanging over them because I never think people perform well if they're fearful. So we're on a pretty determined path to try and make this as net positive as possible. And just kind of building off of that, I know you see a lot of promise in AI, but you've also talked about defending against more powerful cyber attacks in the AI age. How are you thinking about unlocking the promise of AI while also sort of defending against some of those risks to your institution? You're absolutely right, Claire. There's two races going on. One is more how do you deploy AI into your business to become more competitive and grow? And then the other element is, how do you make sure you're safe? And this comes into that trust element I was talking about. And I think there's two things that are different this time. When you're innovating at speed, you have to manage risk at the same speed. And that is a very different speed than the one we were used to, because this thing moves incredibly quickly. So you're having to learn a whole set of new muscles for that. And you can deploy the models to help you as well, but it requires investment. The second piece is that the world's very interdependent now. So AI is arriving at a point of a lot of interdependency. So when the risks cross different industries, we have to have defenses that cross industries as well. So I like to say that you don't compete on cyber, you collaborate on cyber. So all the large banks and many of the other critical industries, we are working together so we can identify where are the vulnerabilities, how do we work out how to patch them and solve them, and then how do we make those patches available to the entire economy and across all industries and to everybody using them. because companies like ours are very sophisticated in our cyber skills and we've got incredible engineers who are able to come up with these solutions. Well, I think it's our responsibility to make sure those are available for small banks and small companies and our clients and customers across the world to make sure that their business models are safer too. So that we're in a race to make sure we do that before the bad guys get hold of this stuff and start using it in a negative way. Yeah, super high stakes. I want to switch gears just a little bit. You seem to have developed a nice rapport with President Trump. You were one of the several CEOs who traveled with him to China this spring. And in June, he praised you personally on social media and cited the quote, big comeback for city, exclamation point, exclamation point, exclamation point, in his trademark way. How have you approached this relationship and what advice do you have for other leaders who are trying to build a relationship with the White House? I remember talking to Tim Cook, always very, always generous and thoughtful in the advice he gives. and it was right before the second term was beginning and he said, you know, just engage and you don't have to agree with, very rarely does one agree with anyone on everything. So, but do your job, stick in your swim lane, don't go out of the swim lane, you're a business person and stay a business person and what is right for your company and your stakeholders, but engage. And I think that that has been helpful, and we're a bank that operates in lots of countries with all flavors of government, and that's the same principle that we use everywhere, which is, you know, stick to what you're good at. Don't give lots of personal opinions on things. We're not politicians. We're not elected. We're business people. So stay to that domain. Fight for what's important for your stakeholders and engage and have good manners. And a bit of a sense of humor is always helpful. And you're famous for that. I want to also ask you about the global economy. The IMF said this week that the global economy could soon test the limits of resilience just given the depleted oil stocks stretched government budgets and AI concentration risk and that's the word we've heard this year over and over again um you know resilience and do you at all see that resilience starting to crack or what do you think about yeah i mean we keep waiting for it um and when we're not we're not seeing it um and there's a heck of a lot that has been thrown at everyone. If you think about COVID, the war in Russia and Ukraine, which then spread across the world. We've had the Middle East crisis. We've had tariffs. And for a lot of companies, what's been really, I think, the main source of resiliency has been how adaptable and quick they are. At the moment, it's certainly not over in the middle east as we can see and there's a lot of pain being felt in supply chains and in logistics and but companies have adapted to it um and they've got pretty remarkable muscles i do see a difference clear between America and some of the other countries so i think with america there's much more of a mindset i'm going to build what i need um and in some of the other countries particularly europe where i've come from more of i'm going to protect what i have but the american and build what I need you know makes you much more resilient in the future you tend to have more flexibility you've built up some cushion but you're also on the front foot innovating and that I think is a much healthier place and we're seeing that that play out in France right now Germany having challenges my own home country UK as well and the US may not be winning style point and but our economy is a lot further you know it's doing far better um and we should be proud of it there's a lot there's a lot of investment coming to the states um there's a lot of respect for the american entrepreneur um and indeed even our capital markets are the best in the world so i i don't think we should be selling ourselves short um but it's certainly it's certainly a challenging time i would describe it as there are lots of storms and stormy clouds around but we don't have any rain yet great okay no rain well Jane thank you so much for joining us really appreciate you know your perspective on cities turnaround and and just your larger perspective as well really appreciate it thank you