Citi's latest blunder: an $81 trillion 'inputting error'

The Wall Street

A Wall Street bank mistakenly deposited $81 trillion into a customer's account instead of $280, the Financial Times reported on Friday. This comes after $900 million was mistakenly transferred to Revlon's creditors in 2020 due to human error and outdated technology.

A Citi spokesperson did not confirm these figures to Business Insider, but he described the latest incident as an "input error" that reflects improvements in the bank's operational controls, as the money was not taken out of the bank.

 Citibank chief executive 

"While a payment of this size could not have actually been made, our controls immediately identified the entry error between two Citi ledger accounts and we reversed the entry," the spokesperson said in a statement. "Our preventive controls would also have prevented any funds from leaving the bank," the spokesperson said, adding that "this did not have any impact on the bank or our customer." The setback comes as Citibank chief executive Jane Fraser struggles to convince shareholders and regulators that she is turning the bank around. It highlights the struggle Citi is making to fix weaknesses in its technology and regulatory framework - a central goal of a sweeping multi-year plan called Transformation, designed to help the bank prove to regulators that its risk controls have improved over the years.

It's the latest in a series of setbacks for Citi, which has been fined $400 million by US regulators for data management and risk controls. In July, shortly after the $81 trillion mistake, Citi was fined $135.6 million for not making enough progress to satisfy the Federal Reserve and the Office of the Comptroller of the Currency.

The Regulators

British regulators also fined Citi nearly $79 million in May for a 2022 incident in which a Citi employee mistakenly added a zero to a trade, triggering Europe's flash crash. These errors and fines add to growing pressure on Fraser, who inherited the bank's outdated systems and regulatory issues when he took over in March 2021. U.S. Senator Elizabeth Warren in October called on the OCC to impose limits on Citi's growth, saying the bank had become "too big to manage."

Fraser has committed to spending billions of dollars on a company-wide initiative to modernize the bank's technology. The bank's nearly 12,000 employees are working on the transformation project, which is being overseen by Anand Selva, a veteran of Citi Consumer Bank.

After the July fine, Fraser hired the bank's technology chief, Tim Ryan, to work with Selva to improve data controls. Fraser defended Citi's progress in the earnings call, reiterating that improving its systems is a multi-year process. "We know what we have to do," he said in a fourth-quarter earnings call with analysts in January. "We've already taken it all into our own hands. We just get to work."