Analysts believe that Citi will, ultimately, be able to save close to $110m annually through reduced maintenance costs as well as more rapid development times. Steve Randich talks about the ambitious overhaul of Citi’s banking IT systems, across 67 countries, which took seven years.

When Citi set out to build a global IT platform, it was always intended to be a long-term project, perhaps over five years. In fact it took seven years, but then the unique infrastructure transformation was of a scale neither attempted nor achieved before. Going back 30 years in Citi’s history, each country had its own independent general ledger and accounting system, some of which were mainframe-based, while others distributed. Getting all the systems to talk and report consistently to a central general ledger was a challenge, not to mention the cost structure that all this diversity caused.

Steve Randich, managing director and CIO for Citi Markets and Banking (CMB), says: “Our goal was to create a globally consistent, standardised platform that would provide the general ledger and accounting for Citi globally, which meant replacing each country’s incumbent accounting system with the global platform. This is what took seven years.”

The scope of the project also changed along the way, as a result of mergers and acquisitions. “In some countries we did not have as a much presence in at the end of the past decade as we have now so we’ve put the system into countries that we’ve made acquisitions in over recent years. Korea is an example of this.”

Project scope

Mr Randich joined Citi two years ago from Nasdaq, where he was responsible for all operations and technology for five years. The scope of the Citi project was soon expanded beyond general ledger and accounting systems. “We took the platform and expanded it to include other functions such as cash collection, FX and money markets, and in the past 12 months, begun processing loans and other financial functions required in the commercial bank.”

The switch from legacy to new was rolled out on a country-by-country basis – one of the reasons why the implementation needed seven years. Each implementation was managed locally and regionally, using a global standard and platform. “There was no case where we needed to run the systems in parallel,” says Mr Randich. Although the Citi platform is global, supporting 67 countries, it has a spoke and hub configuration and it runs through regional clusters. Due to the need to roll it out as fast as possible in order to retire the incumbent general ledger systems, Citi now needs to go back and do more standardisation around clusters and regions, so that they are all using the same software.

This work will be completed within the next year, but Citi is also expanding the functional footprint to include more financial functions, in more countries. “There are many more functions worldwide that are separately managed and disparate, that we could benefit from by standardisation with a globally consistent platform. This work will continue over the next few years and will allow us to achieve higher levels of consistency, better cost structures and the ability to retire older legacy systems that are supporting single regions and countries.”

The main benefit of the new system is through being able to support the growth that Citi has seen. The fact that it spans 67 countries means it is very far-reaching into the emerging markets that have experienced huge growth over the past few years. “As a result, the system has enabled Citi to achieve 30% growth year-on-year in these emerging markets, whereas the prior platform would have presented more constraint on that growth.” Citi’s presence in some of these markets for more than 100 years means that even in what are considered emerging markets it has legacy systems that need updating.

The strategy today is to help increase Citi’s competitiveness in the marketplace by better leveraging technology through more efficient straight-through processing and a more mature, commoditised product and having a fast time to market for newer business areas where a first-mover advantage counts. “We have a drive across Citi to simplify our technology environment to have a less costly, more agile, more globally consistent technology platform.”

Innovative delivery

In general there are two types of businesses – new and emerging, which command high margins that need innovative technology delivery; and mature economically commoditised with narrow margins, which require technology efficiency and better handling of transactions volumes. “I have to deliver on both of those approaches to technology simultaneously but underlying all of that we want to achieve the lowest cost global standards possible. Technology is very important and in many cases technology is Citi’s product, as it touches our customers and provides a competitive advantage. Banks are competing on technology today.”

He believes Citi would not have been able to support the growth of the past seven years without the platform and now believes the bank is in a position were it can further leverage the platform to drive even more consistency. “The desire to simplify our technology environment is enabled by where we are at today.”

CAREER HISTORY:

2005: Joins Citi, where he is now managing director and CIO for Citi Markets and Banking (CMB). In this role, he is the global head of CMB Technology, responsible for the strategy, development, and implementation of all technology.

2003: Joins Nasdaq as executive vice-president of operations and technology and chief information officer. Prior to his time at Nasdaq, Mr Randich served as executive vice-president and CIO of the Chicago Stock Exchange.

PLEASE ENTER YOUR DETAILS TO WATCH THIS VIDEO

All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker



For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Join our community

The Banker on Twitter