Citigroup’s unit dedicated to taking on the challenge presented by fintech has flown under the radar since its former leader, Heather Cox, left for USAA a year ago.
But I recently caught up with Yolande Piazza, who has run Citi FinTech since Cox’s departure and was named its permanent CEO in March, for an update about the group’s progress. The 130-person team based in Queens, N.Y., is taking an intimate approach to customer feedback, having customers try new mobile apps at home under the watchful eye of a video camera (preferably while they’re fully dressed). They’re taking an outsider look at banking products by recruiting members from tech companies. And they’re giving boxes of Champagne to team members whose projects fail.
Citi FinTech’s moves are worth watching as the industry as a whole struggles to innovate from within.
Citi FinTech’s goal these days, Piazza said, is to provide simple and convenient access to money.
“Gone are the days when banks get to dictate the hours when people have access to their money,” she said. “We can no longer operate in a ‘5:00 and the doors are closed’ type of environment.”
Initially, when consumer banking CEO Stephen Bird set up the team in October 2015, the bank thought the group’s goal was disruption, she said. “We thought customers wanted big, leapfrog-type initiatives,” Piazza said.
Then the Citi FinTech team spoke to 2,500 customers over five months to home in on exactly what customers wanted.
What they really want, she said, is trust.
“They want to know their money is being protected and when they interact on a mobile, there are a lot of concerns that that isn’t the most secure place to be,” she said. “Forty-four percent of Americans who don’t use mobile banking say it’s because of concerns about trust.”
Citi FinTech builds trust, Piazza said, through “customer co-creation” — in other words, by communicating with and testing ideas on customers.
One interesting way the team tests new mobile features is through real-time, Skype-style remote video testing with customers wherever they feel comfortable, including in their homes. It was important to be able to see what customers thought in their normal, day-to-day environment, Piazza said. A core group of customers acts as an advisory board of sorts for new mobile app features.
“We did have to implement a rule that clothes are mandatory and preferably decent pajamas,” she said. “Within 24 hours we have feedback and know if we should scrap what we're doing and start again.”
The team also looks at indirect feedback, for instance by analyzing how long it takes customers to get through a process.
“Even though they say they love it, if it took too long, it's not simple enough, so we'll go back to the drawing board and do it again,” Piazza said.
Results so far
Over the past year, Citi FinTech has launched two products.
In November 2016, it opened a global API Developer Hub that allows the bank to quickly connect with developers via application programming interfaces.
“Since the hub’s launch, we have expanded functionality to incorporate 10 countries with APIs across eight categories available for developers,” Piazza said. The categories include account authorization, money movement and “pay with points.” These APIs have already been used to integrate with partners like 1800Flowers, Best Buy, honestbee, Lazada, Mastercard, Qantas, Virgin Money and Wonder.
Jacob Jegher, senior vice president, banking and head of strategy at Javelin Strategy & Research, said that all banks will need to embrace APIs the way Citi, as well as Silicon Valley Bank, Capital One and BBVA Compass have done, or risk becoming irrelevant.
“If you’re not thinking about or doing something with APIs today, you’re behind the pack,” he said.
The second new product was a suite of mobile features that Citi launched in December for its U.S. retail bank clients, making Citi one of the first global banks to combine banking, money movement and wealth management in a mobile app, Piazza said.
To improve the mobile app, the Citi FinTech team made 155 internal business process changes throughout the bank.
“We didn't want to put up a smoke-and-mirrors mobile website,” Piazza said. “We wanted to make sure we were enacting straight-through processing and that we weren't just changing the experience on the front end, we were changing it all the way through.”
The team has reduced the number of fields required to open a brokerage account by 55%, and has seen a 75% reduction in approval time for opening a brokerage account.
Citi FinTech could put new mobile app changes into production every day, Piazza said. But as a result of customer feedback, they limit the changes to a monthly App Store release.
“People don't want to be constantly downloading and updating their banking app,” Piazza said.
Besides the individual projects, Piazza said her group is disrupting the way Citi operates.
“We break glass, and that's not a term that's often used in banking. We break down the silos,” she said. As the group is solving a problem, it will bring in business, legal, risk and even internal audit people to participate.
Because of its agile operating model, Citi FinTech now makes decisions in hours, not weeks. About 90% of decisions can now be made within a project team, instead of being escalated up, Piazza said.
A fun, fintechlike culture
Half the employees at Citi FinTech were recruited from outside the financial industry.
“We hired people from startups, we hired them from other tech companies, we deliberately didn't go off to banking resources,” Piazza said. “We have really good bankers at Citi. What we wanted was challenges, curiosity. We wanted people who had a passion and a purpose in their relationship with money and wanted to be able to come in and change that for everybody.”
Piazza admits it’s exhausting to be tested all day.
“I come home mentally tired at the end of the day from the amount of challenge statements, but it's a really fun place to work when you have people constantly saying, why can't we do this for our customers, why wouldn't we make this simpler and easier?” she said.
To keep the culture fun and fintechlike, the Citi FinTech digs just across the East River from Manhattan in Long Island City feature pingpong tables, daily chess tournaments and beanbags, “which I think are absolutely gross, but people seem to get enjoyment out of just being able to work in a fun, relaxed environment,” Piazza said.
“Fun isn't just happy hours. Fun is making sure people have the freedom to express, freedom to challenge, and they're empowered to make decisions on behalf of their domain or investment,” Piazza said.
The group has embraced the Silicon Valley concept of failing fast. People who own their failures are given boxes of Champagne.
“We ask that you learn something from it, and how are you going to apply that,” Piazza said. “There's all sorts of failures that come in on a regular basis; it's amazing how alcohol is a motivator." The environment "really does create a safe space for people to be able to test and learn, to put a toe in the water, to be able to push something in the envelope, and all they need to do is be able to share that learning.”
The idea of encouraging people to fail “is countercultural for a bank right now,” said Jegher. “But banks are going to have to act more like tech companies even though they’re still banks. The leaders of the firm have to say it’s OK if you fail fast.”
Piazza has been with Citi for 29 years. How did she manage to able to pivot to this role of disruptor?
“I'm always looking for ways to change,” she said. “Coming to FinTech, I felt like I'd come home. I felt like I was no longer on an island trying to champion the processes.”
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