JPMorgan Chase's unhappy dad; Citi's uncooperative attitude

Somebody’s watching me: The Citi FinTech team is taking an intimate approach to customer feedback, having customers try new mobile apps at home under the watchful eye of a video camera. “We did have to implement a rule that clothes are mandatory and preferably decent pajamas,” said Chief Executive Yolande Piazza, who has been leading the team since Heather Cox left the Citigroup unit for USAA a year ago. But this “customer co-creation” — in other words, communicating with and testing ideas on customers — is how Citi FinTech builds trust, which, it discovered, is what customers really want, Piazza said. Initially, when consumer banking CEO Stephen Bird set up the team in October 2015, the bank thought the goal should be disruption, she said. “We thought customers wanted big, leapfrog-type initiatives,” Piazza said. But after speaking to 2,500 customers over five months, the team’s focus shifted. “Forty-four percent of Americans who don’t use mobile banking say it’s because of concerns about trust,” Piazza said. Read Penny Crosman’s detailed story about what Citi FinTech is up to here.

Should dads get as much time off as moms?: A complaint that a male JPMorgan Chase employee filed with the Equal Employment Opportunity Commission argues that the parental leave policy at the bank is unfair and illegal. Derek Rotondo said he applied in May for 16 weeks of parental leave, which JPMorgan provides to the “primary caregiver” of newborns. “Non-primary” caregivers get two weeks. The company responded to his request by saying that he had to show his wife would returning to work within 16 weeks of giving birth or that she was “medically incapable” of taking care of their son. As she was a teacher in good health on summer vacation, Rotondo couldn’t qualify as primary caregiver. “I consider myself really a dad first — everything else comes second,” said Rotondo, who is based in Ohio. “This time is very important for me to spend with him to get to know each other.”

Why the gender pay gap persists: After Natasha Lamb asked at Citigroup’s annual shareholder meeting if the company would publicly disclose information about its gender pay gap, another attendee went to the microphone to speak out against the idea. He talked about his daughter, a chemistry major who works as a high school teacher, as he argued that there are justifiable reasons why women might earn less than men. “Sometimes it’s personal decisions. Or they leave and have children. That greatly affects their earning power. Men don’t have to do that, at least not yet,” he said. Perhaps, Lamb acknowledged, clarifying that she would want to compare men and women in similar positions with the same level of seniority. Lamb is a managing director at Arjuna Capital, which is trying to pressure companies to disclose compensation data for men and women as a tactic to close the pay gap (an effort we have covered here previously). This detailed Bloomberg Businessweek story looks at how Lamb is faring in her mission and examines why the pay gap is so persistent.

How to get more diversity in tech startups: Morgan Stanley is taking its diversity strategy a step further. This week it launched an innovation lab that is only for tech startups that have a woman or a person of color in the C-suite. Morgan Stanley is seeking four or five startups for its first class and plans to build up to 10 to 15 over time. Those accepted into the program will receive $200,000 in equity or convertible notes and some space on the ninth floor of Morgan Stanley’s Times Square headquarters, among other benefits.

New hires, old story: Among graduates who go into the financial services industry, gender diversity is increasing, but there is still a gender pay gap. The initial pay difference of 17% widens after three years to 22% (at that point, the average pay is $90,000 for the men and $73,000 for women), according to research by the Financial Times. One guess as to why: A third of the men go into the industry’s most lucrative fields — private equity, venture capital, hedge funds, investment banking, and mergers and acquisitions — compared with just a fifth of the women.

The term of the day: The meaning of “artificial intelligence” has become fuzzy, as often happens with buzzwords. But Cathy Bessant, Bank of America’s chief operations and technology officer, said its status as a buzzword belies the fact that AI is not really that new. She also said the phrase is misleading given that the “intelligence” itself depends on human programming. “Intelligence is created by humans, even if it is run on an automated basis. We can think about artificial intelligence as algorithmic intelligence, as well, because what takes data and produces an outcome are algorithms that are written, overseen, governed, and managed by people. Automated intelligence is often better, more predictable, faster, cheaper, and has a lower error rate — as long as our algorithms work,” Bessant said. “There is no doubt AI is the term of the day, but we have been using automated intelligence for a lot longer than people think.”

Michael Nagle/Bloomberg

Keeping the pressure on: On Monday, Sen. Elizabeth Warren, D-Mass., called for Federal Reserve Chair Janet Yellen to remove 12 of Wells Fargo's 15 directors for failing to avert the phony-accounts scandal. In an eight-page, 46-footnote letter, Warren said: “Federal Reserve regulations and guidance impose clear risk-management obligations on the board — obligations that are quite demanding for a bank as large and complex as Wells Fargo.” Warren cited the failure of Wells' 12 “holdover” board members to create adequate risk management practices, a violation of Fed regulations that constitutes "unsafe and unsound practices.” One of those board members happens to be Elizabeth Duke, a former Fed governor, as this story from U.S. News and World Report notes. Duke joined Wells’ board in 2015.

Role call

Citigroup hired Alison Harding-Jones, a senior investment banker at UBS, to lead Citi’s mergers and acquisitions for its Europe, Middle East and Africa operations. She will begin her job as vice chairman of EMEA corporate and investment banking in October.

PricewaterhouseCoopers is adding two independent directors to its governing board. One is Carol Pottenger, a retired U.S. Navy vice admiral who was one of the first women selected for sea duty. The other is Carlos Gutierrez, a former U.S. Commerce Secretary under President George W. Bush and a former CEO of Kellogg Co. Their four-year terms go into effect July 1.

In case you missed it

App-lause: Have a quick look at our Digital Banker of the Year honorees, led by Bank of America’s head of digital banking, Michelle Moore. You can also read a more detailed feature about how Moore is improving B of A’s mobile app here, or about how Alice Milligan, chief customer and digital experience officer for Citi cards, plans to make every service it offers available through its app here.

CHRISTOPHER APPOLDT

Beyond banking

Slipping after seven years: Women had been making progress getting into the boardroom for seven years. But the numbers for 2016 are in, and the share of open board seats that went to women went down last year, ending the previous upward streak. Women filled just under 28% of the 431 open seats at Fortune 500 companies, compared with 30% the year before. Get the breakdown here.

The next Uber CEO: Travis Kalanick is out as the chief executive of Uber. Business Insider offers some lessons that other companies can take from the saga: prioritize culture, respond quickly in the face of crisis, set change in motion from the top and cultivate employees as advocates. The Wall Street Journal looks at why Kalanick’s resignation has women claiming victory, as a case where a single voice — of a junior engineer no less — speaking out about workplace inequality brought results. Now, the search is on for a new CEO and Facebook’s chief operating officer, Sheryl Sandberg, is at the top of Uber’s list.

Sign up to receive this weekly news scan here, and find out how to get a digital or print copy of the monthly American Banker Magazine here. The annual rankings of the Most Powerful Women in Banking and Finance will be in the October issue of the magazine.