How Citi thinks about innovation, customer experience, and employee retention

Titi Cole, who runs Citi's Legacy Franchises unit, sits down with Chana Schoenberger, Editor-in-Chief of American Banker, to discuss her work running the businesses Citi has announced it will divest, as well as the innovation and design thinking that keeps the bank moving toward the forefront.

Transcription:

Chana Schoenberger:
m Chana Schoenberger, Editor-in-Chief of American Banker, here with the Most Powerful Women in Banking, and I have with me here today Titi Cole from Citi. Thank you for joining us.

Titi Cole:
Thank you for having me.

Chana Schoenberger:
So the first question I wanted to ask you is, what's important for banks to think about as they're refining the customer experience?

Titi Cole:
As we think about client experience in our industry, there are a couple of pieces I think are so important to get it right. And the reason why it matters is now more than ever, our clients have always had choices, but now more than ever, they have a lot of choices about where they get financial services from. And so we have to make sure that we are actually delivering on the things that matter to them. So the first piece I think that's really important is to truly understand the current state, the client journeys and the pain points, not what we think they are, but actually the realities. And I can tell you every time we've tried to map a client journey, it could be buying a product, it could be used in a service across channels, you will find so many little things that you didn't think could happen.

But when they go off the green path into those sometimes more custom paths, you can find some really sticky wickets that really get in the way of delivering client experience the way we want to. So first is really understanding the client journey and the pain points across the current state. And then building off of that, I think it's really important to try your best to ideate from a clean sheet perspective, which is don't just take what they do today and say, Okay, well we can make these three incremental changes and it'll be better. But actually start with, if we were doing this from scratch today, which I know we're not, in most banks ,because you have legacy products and systems, but really start with a clean sheet approach on what should it actually be like. And make sure you test that with the people who are closest to the clients.

And most times it's not the people sitting in our corporate offices, it's the people in the contact centers, the people in the branches, it's the people in the op centers who see the impacts when this isn't delivered properly, to truly ideate on what the future state should be. And then the third piece, which a lot of us forget about in the industries, you gotta go end to end. It's not enough to have a shiny front end and a great mobile app that works, but then they open the account and then you send them a whole bunch of paper <laugh>, or you ask them, God forbid, to fax something in, right? Because they need a signature, you say, Right, exactly. But we still have those in our industry. And so backend processes or you say, Okay, that was really great that you started in this channel, now you have to go to a branch to sign. And it frustrates our clients. So it's so important that you truly think end to end when you're redesigning client experience, not just the sales and the prospecting, but all the way through the servicing so that you can truly deliver on a best in class client experience, which again, is what we as an industry have to do a better job on.

Chana Schoenberger:
So you were recently named to take over Citi's legacy franchises unit, which is the unit with all the businesses that Citi has announced it's going to divest <affirmative>. So that's a really interesting challenge. <affirmative>, how do you get people to be motivated to work for businesses they know the bank doesn't want to own?

Titi Cole:
Yeah. So I will tell you it is an absolute privilege to get to lead our legacy franchises organization Legacy franchises was created to house essentially all our international consumer businesses in 14 markets that we had decided to strategically divest. And the context around this is important because this wasn't about the performance of the businesses, this was about where we wanted to allocate capital and a strategic refresh to focus on our home markets in the US for personal banking, wealth management globally, and then our institutional client business really serving the global needs of our clients. And so because of that, we decided we needed to divest in these 14 markets. And as I think about a year and a half now into the journey, the teams have done an excellent job, financials, client experience, people management risk, all the metrics are in great shape. And as I think about how we've gotten there, it's three key things.

I think first is I have the privilege of leading a fully engaged management team that has been communicating robustly with clarity to our team members very, very frequently. The team members in legacy franchises, about 60,000 of them, didn't ask to be in legacy franchises. And if they had their choice, they probably wouldn't want to be part of the divestiture. But we have made sure that we helped them understand why the decision was made and then we're communicating to them very robustly about what's happening next all the way through the buyer processes. We have nine transactions signed. We've actually closed and completed our divestitures in Australia and the Philippines and several more in coming quarters. And that's all done very well because we have been very clear with our teams about what's happening, the buyer process and what's next for them. The second thing that I think have made has made a difference and helped keep the teams really intact and engaged is because we have done everything we can to find the absolute best buyers who will continue to invest in these iconic businesses in the local markets.

And I think the team has taken a lot of comfort in seeing that the buyers are so excited about the talent that they're getting and the opportunities that this is actually opening up for them. Outside the US in particular, you will find that Citi is known as the University of Banking. Lots of great talent has been through Citi in all these different countries. And so our buyers are very excited about the talent that will be joining their organization. And then the third thing I think that has made a difference for our teams is we've really tapped into the purpose behind what we're doing and the sense of pride around one, what they've accomplished in their time at Citi, which we celebrate before we close the transactions, but also the fact that these are historic transactions in all these local markets. Most places it's the largest divestiture or acquisition that the buyer has done.

So these are things that have been written about that will be written about for decades. And so I proactively engage with the team around the sense of pride about being part of that and being able to land at the buyer on the front foot, feeling really proud about all they've accomplished and how they did it the right way, which helps them in their future roles at the buyers. And then they'll always be Citi alums and Citi alums that we are very proud of and very thankful for. So again, we're not done yet, but really great progress. But a lot of it was about communicating, tapping into the sense of purpose and giving them reasons to believe that while they may not be at Citi, there is actually a great future ahead for them with buyers who will invest in the franchise, in our clients and with our teams.

Chana Schoenberger:
We're in sort of an interesting geopolitical world right now. There's a lot going on. How do you think about how banks can help American businesses overseas? Citi obviously is a big player in this area, but things are so uncertain.

Titi Cole:
It's been interesting to see how corporate clients have reacted in the uncertain times and the geopolitical risk that are in is in the marketplace around the world. We've actually seen them come to us more for advice. We're in 95 countries around the world and we have decades of experience, local market experience and connections to facilitate international trade and financing all these countries. And so we've actually seen more and more clients come to us for help figuring out the environment, figuring out how do they move their assets, how do they allocate capital? And that's when the power of our global franchise really starts to resonate. And we saw that in our last earnings. So as I think about these geopolitical environment, our job is to continue to provide advice that is relevant, that is at tune with the local environments based on operating in 95 countries and decades of experience there. And making sure that we make it easy for our clients to facilitate and achieve their mission of a corporate client who wants to move money around the world. Our global capabilities are unparalleled and we really have seen a rush to that quality to be able to make it easier for them to navigate these choppy waters.

Chana Schoenberger:
So are you seeing companies try to pull back or try to change their operations so they're more domestic or based mainly in countries they think of as friendlier now?

Titi Cole:
Well, we're definitely seeing change, and I wouldn't say so much pull back or not, but I think people are assessing. They're assessing their supply chains, they're assessing their partnerships and they're assessing their balance of trade. And you're seeing new partnerships and new alliances form, you're seeing certain things change and you're seeing a need for maybe more business resilience and redundancy and less dependence on a single source or a single country. And so again, people are establishing almost kind of new trade patterns and really thinking about how do they manage capital more efficiently in a world where in one way it's more interconnected than others, but in other ways there's a lot more risk that you have to manage and navigate through.

Chana Schoenberger:
Definitely. It's like all the borders are shifting now.

Titi Cole:
<affirmative>, there's a lot in play.

Chana Schoenberger:
So this is something that we had talked about before. How does a big bank like Citi recruit the smartest and brightest young graduates? There are so many young people today from the best universities who want to go into tech or startups. How do you convince young people that they should want to be bankers?

Titi Cole:
So I do think we have to compete more <laugh> than we needed to 20, 30 years ago when half the class either wanted to be investment bankers or consultants because they have more choices now. But the value proposition remains the same. And as I think about, especially for large global banks, it's, one, access to the opportunity to work around the world if you choose to. It's, two, learning from and being part of an apprenticeship culture where you'll be exposed to the smartest minds and also a ton of expertise. And then I think three of the purpose behind what we do at the core where people serving people, we provide access to capital that can help scale businesses. We help people figure out how to retire someday, how to save for college. And we help lift people out of generational poverty. And the impact in communities changes communities.

If you think about the work that banks do, both with their foundations, but also in what they do, financing sustainability measures and creating equity around the world. So I think tapping into not just who we are but the purpose makes a difference. And then we have to continue to make sure that we have value propositions that resonate. Flexibility matters. So we are having to be more flexible as an industry to make sure that the best talent feels like they can have the flexibility they need for their work and personal lives in our industry. We need to make sure we have environments that are supportive and inclusive and create a safe environment where all can thrive regardless of what they sound like or look like or what their backgrounds are. And then finally, I think we have to continue to make sure that we have pipelines where talent can experience different things.

You know, come into banking and over 30 years it could feel like five different or more different jobs because you could be on the client side first and then you could do marketing, and then you could go to the institutional side and then you grow up in consumer banking in risk. Those could be easily five different careers somewhere else. And that's what you get from a large bank. So we have to make sure that the ability for talent to move and grow remains just as fungible as it was back then. And if not even more reinforced now because that's what they want to do. It's not come in somewhere and stay in one function for decades. But it's really helping them understand that you could be at a bank and walk around the world and have a bunch of different careers over a couple of decades.

Chana Schoenberger:
That does sound very attractive.

Titi Cole:
I'm bullish <laugh> on this sector.

Chana Schoenberger:
We should all become bankers.

Titi Cole:
And do good <laugh>

Chana Schoenberger:
Making the world a better place.

Titi Cole:
Yes, because we can do that. And we do that at our finest when we're at our best. We do make a difference around the world.

Chana Schoenberger:
What's the most interesting change that you've seen in finance the last five or 10 years?

Titi Cole:
So I'll come at that from a consumer perspective because that's where I spent most of my time. And one of the things that I am just so proud of how our industry has leaned into the evolution is the ease of moving money and payments.

Chana Schoenberger:
That's the best.

Titi Cole:
10 years ago, mobile payments was, oh, can that actually be done? And then five years ago was Apple Pay. And think about where we are now. You don't even think about can you use your phone to make a payment? But five, 10 years ago it wasn't clear that was actually going to happen. Or think about how easy now with Zelle or other things like Zelle, you can send money anywhere. I still remember especially as somebody who grew up outside the country, having to go to Western Union, nothing against Western Union <laugh>, but you would go there and pay fees and then you'd take days and the other person would go somewhere and they'd line up and then they'd change it into the foreign currency and they'd pay all these other fees or they'd be like they never got it. And think about how much time that took on, how expensive it was, and think about how easy it is now where you can be anywhere in the world.


Chana Schoenberger:
Two taps.

Titi Cole:
Yeah, two taps, money's there, it's safe, it's secure, they get it. And very little if any fees involved. So the ease that we brought into payments and the ability to move money around the world, and this is just on the consumer side, not talk about the corporate side, which had always been a little bit more evolved anyway, I think has just made it so much easier, especially for people who have transactions or payment flows that caught remittances that then move around the world.

Chana Schoenberger:
Yeah, it is an amazing thing and this is one of the areas where the rest of the world is really leading in the US. Just following <affirmative>, I remember finally when I worked in Japan during the financial crisis, there were all kinds of things that I could do on my phone there that I could not do on a phone in the US. And it's only this year that New York City's subway accepts mobile payments at the turnstile, which is something you could do in Tokyo 15 years ago.

Titi Cole:
Exactly, exactly.

Chana Schoenberger:
Yeah. So it's amazing. Where do we get all the payments innovation, How can we bring more of that here?

Titi Cole:
I think part of it is one understanding to your point that most of Asia, which has been a real source of ideas for us at Citi because of our Asia franchise, not just on the consumer side, but on the corporate side ,most of Asia and Europe is well ahead. So part of it is tapping into what's going on in there. The other part is really being open to ideas from talent in all levels of the organization. Not just those of us who've been there a long time and seen it and done it, but really the young blood that's coming into the industries they grew up in a world where funds availability and paying a check and waiting is so alien to them. We had to make sure we're listening to them because as they think about how they gave me five things, how they get instant payments, how they can connect seamlessly, those are the things that we need to figure out. How do we reduce the friction from the banking system for our consumers?

Chana Schoenberger:
I'm constantly amazed at watching Venmo, the number of especially younger people, <affirmative> in my contacts who automatically set their payments to public. My payments are set to private. Mm-hmm. Because I'm a grown up. But young people are, not only are they not embarrassed or weirded out by the idea of telling everyone what they spend and who they spend it with and what it's for, they think that's normal. It's almost like a social network for them. Exactly. It's a totally different approach to payments.

Titi Cole:
It really is. It really is. And I <laugh> still tell this story. When my son opened his first checking account, we went to the branch so they would show him how everything was done. And then a couple of months later my mom sent him a check for the birthday and he was like, Okay, good, can I spend it now? And I said, Yeah. So we took a photo, he put it and the money was available, but then they said, Oh, $0 available now and the rest available two days later or something because his account was brand new. And he was so mortified about why he couldn't go to Game Stop and spend that money right there. And then he said to me something which struck me, he said, But if we had gone to the branch, they would've given me the money then. Right?

I said, Yeah, but you didn't. We didn't. Okay. So because I did it in a way that's easier and better for everyone now I have to wait two days for my money <laugh>. And to him that contradiction alert was just an example of how we want to incent digital behavior, but we actually put friction in the way of that behavior and then people will say, Well if I actually need my money, the fastest way is to go to the channel that's least convenient for us and for them. So those were examples of some of the things that we have to just ask ourselves. Why do we still orient to some of these legacy channels when we know we want to incent more digital behavior that's better for us and better for the client.

Chana Schoenberger:
Well this is one of the things that the pandemic really made clear was that a lot of the things that banks had been dragging their feet on, there was no reason for that. And when they had to do it, they

Titi Cole:
Got it out.

Chana Schoenberger:
Exactly. So something like DocuSign, <affirmative>, or any of the electronic signatures. Exactly. It took them two weeks after seeing, well, it's on the roadmap for 2027 or something. They just got it done and then all the financial advisors were easily able to sign up new clients. Exactly. Put them into new funds, which is if you can't meet with your clients, you cannot possibly expect them to do a wet signature. Exactly. Or e-notarization <affirmative>. Right. Why did it take, I ever need to sit in the same room as a notary?

Titi Cole:
And sign over and over again. And those things have been around. To your point, and we actually joking, we need to bottle that sense of urgency that we all had during the pandemic to get things done cause it didn't have a choice and make that the BAU.

Chana Schoenberger:
How do you do that?

Titi Cole:
Well, you just have to keep leaning to it and ask yourself one of the things that say, okay, why will it take nine months? You can have, why'd you take a year? You have a baby in nine months. Why does it take a year to get things done? My colleagues don't appreciate it when I say that, but I do. Because you have to keep saying, why does it take that long? And helping our teams understand that the rest of the industry and competitors outside the industry aren't staying still. So we can't stay in our bubble and say everything takes a year and three releases to get done because the innovators are not taking a year and three releases.

Chana Schoenberger:
It's definitely true. Yeah. I mean a lot of it is regulatory or compliance, probably more compliance than regulatory. But I did a Leaders interview a couple of months ago in which an executive was talking about zero based design, <affirmative>, and exactly, I was unaware of the concept. But this is the idea of course, that instead of starting from the way things are, start from the way they should be

Titi Cole:
They actually should be, which is that clean sheet future estate and then walk backwards. So yeah, maybe you need to put a few more things on it, but if you always start with the way they are, oh, you're going to get this incremental progress. Right.

Chana Schoenberger:
Yeah. It would be great if we could, I mean, no one wants to go back to the pandemic obviously, even though Covid isn't entirely gone <laugh>, nobody wants to go back to those days

Titi Cole:
No more lockdowns, please.

Chana Schoenberger:
<laugh>. But if we can figure out a way to make people work that quickly and feel like their lives and their jobs really depend on coming up with new ways to do things, <affirmative>, not just in banking, really everywhere.

Titi Cole:
And a lot of it was just helping, The reason why everybody moved so quickly was the status quo was no longer an option <affirmative>. Because if you stayed with the status quo, then you would do nothing. Trainers wouldn't have any income because if they were waiting for people to come back to the gyms, it wasn't going to happen. So everybody went virtual. So for us in an industry, it's just continue say the status quo is actually not an option. Whereas we tend to think the status quo is the comfort zone. And then it's like, okay, so tell me why I need to change. But if we flip it to, well the status quo is not an option because everything around us is changing, therefore we have to move, we have to innovate. That's our lifeblood and that's how we make sure we don't become a utility or a set of rails for the rest of commerce versus really the innovators that we need to be.

Chana Schoenberger:
And the problem also is that as everything gets more digital, every consumer, but especially the younger consumers, are very used to having consumer based apps that do whatever they want them to do in a fun, cheerful, bright, gamified way right now. So if I want a car 10 seconds on my phone and a car is waiting for me outside. I can get an Uber, I can buy a car, I can rent a car, I can do a lease, whatever. There are all kinds of things that are possible for me to do. And I think that's what people increasingly expect from their financial institution, not just from consumer banking, but increasingly even things like small business banking or even commercial banking. Why does commercial banking require 18 signatures every time you file another piece of paper?

Titi Cole:
And to that point, we talk about expectations that being set out of our industry. So you can't just compare yourself like, Oh, I do it better. They're 18 days, I'm 15 days, I'm better. No, because <laugh> client expectation is like 30 seconds. And where we do have regulatory requirements, which are fair, let's make sure we understand those and say, okay, what is the most effective way and efficient way to make sure we address those. But a lot of it is just the legacy processes that have been duct taped and layered on top of each other. And the truth is we gotta cut through that with a sense of urgency because that status quo will not be sustainable in the long run.

Chana Schoenberger:
It's not what the consumers want <affirmative>, and it's not what they understand and they're just, they're moving on. Yeah. Great. Well, thank you so much for coming today. I really enjoyed talking with you and congratulations on the Most Powerful Women.

Titi Cole:
Thank you. It was great to be here and talk to you.