&w=1024&resize=1024,0&ssl=1 "Key to Citigroup's regulatory problems: Need to “upgrade” staff skills world news")
Citigroup has struggled to adequately train staff in risk, compliance and data functions, according to the bank's own assessment, highlighting why regulatory problems are taking years to resolve despite spending billions.
Citi's analysis, some of which was seen by Reuters and not previously released, showed that the bank faced a shortage of skilled labor, sometimes finding that it lacked the appropriate training and assessment tools to correct regulators. Challenge Bank, which has been operating under two regulatory reprimands, called consent orders, over the past four years must resolve these issues to lift the decree.
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At one site, for example, the review noted “inadequate compliance risk management skills among staff who directly deal with such issues.”
They were presented in a spreadsheet in December 2023, tracking Citi's progress on various aspects of the compliance order.
Separately, four sources familiar with the matter said the situation became more complicated when CEO Jane Fraser launched a huge exercise to simplify the bank in September 2023, laying off thousands of people and reducing the number of management levels.
In the process, some employees involved in issues related to the consent order were also dismissed, according to sources.
Reuters was unable to independently determine whether the layoffs hampered the bank's overall efforts to resolve the compliance orders.
Without providing details, the city denied this, saying that “cherry-picking the numbers would paint a misleading picture.”
“We continue to invest heavily in talent and training to ensure we have the right people and skills in key areas such as data, risk, controls and compliance,” the bank said in a statement. He added that he actively assesses “the skills we need to develop so we can recruit” and increases skills accordingly.
In response to questions raised by Reuters, Citi also said it has invested billions of dollars in a “transformation” project to address risk, control and data management issues raised by the US Federal Reserve and the US Federal Reserve's 2020 compliance order. desk. Comptroller of the Currency. The analysis seen by Reuters was done in response to the Fed's consent order.
Citigroup said about 13,000 people were dedicated to the project to review its controls and systems, with thousands more supporting efforts across the bank. The bank has around 229,000 employees in total.
The Federal Reserve and Office of the Comptroller of the Currency declined to comment.
CEO Jane Fraser has previously said that resolving CITIS regulatory issues is a top priority. Regulators said they identified widespread risks and data errors at the bank that attest to its safety and financial strength. The bank was placed in the penalty box in August 2020 after mistakenly sending nearly $900 million of its own funds to creditors of cosmetics company Revlon.
In July, the Fed and OCC reprimanded and fined the bank again. The OCC said the city has failed to make substantial and sustained progress in complying with its compliance order.
It also required the OCC to enact a new quarterly process to ensure it dedicated sufficient resources to meet compliance milestones. As of mid-July, the plan had not been agreed upon by regulators.
Last month, the company announced that its chief technology officer, Tim Ryan, would take over data management efforts alongside chief operating officer Anand Selvakesari.
Difficult problem
The Bank's analysis clarifies why the issues are so complex. In one section, for example, the bank stated that the technical skills of its employees, including data governance – policies that define how data is managed – need to be improved. But it also noted that when it came to data governance, its training curriculum did not adequately address the “skills identified as needing improvement.” It identified areas such as data analysis and digital literacy as needing improvement.
Regarding the critical role in compliance, the bank discovered that it had not specified the skills needed to be successful. It also stated that there was no adequate assessment of whether employees had the appropriate skill set for these roles.
The city did not comment on the specific issues raised in its analysis.
CITI reduction
Sources familiar with the bank's operations said Fraser's dismissal resulted in the removal of some people involved in regulatory work.
In risk management, for example, the bank fired or rehired 67 people out of a group of 441, according to a Citi document that lists the roles affected in a round of layoffs.
Some sources said the layoffs have disrupted work because employees fear for their jobs and the loss of managers sometimes means a lack of direction. But the city disputed that view, saying the consent order was careful not to allow the layoffs to affect work.
“The data speaks for itself, but cherry-picking the numbers would paint a misleading picture of the significant resources dedicated to this effort,” the bank said. “Our approach was disciplined and methodical, and priority was given to protecting our ability to meet our regulatory commitments and accelerate this important work.”
