Citigroup is looking to axe external IT contractors and hire thousands of full-time IT staff, reported Reuters.
This move comes as the bank addresses regulatory penalties linked to data governance and inadequate controls.
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The bank head of technology Tim Ryan informed employees that the group intends to decrease its reliance on external IT contractors, reducing their share of the workforce from 50% to 20%.
This decision was shared in a recent internal presentation, which did not provide a clear timeline for when these adjustments will take place.
This move comes after Citigroup faced a $136m fine for insufficient progress on data management issues in June last year.
Finance chief Mark Mason also acknowledged the need for increased investment to address these challenges, even as the bank reduced its profitability target for 2026 due to rising regulatory costs.
A “recent fraud event” involving external contractors, which cost the bank $22.9m, was cited as a factor in the IT revamp, the presentation stated.
In a statement to Reuters, the company stated: “Citi is growing our internal technology capabilities to support our strategy to improve safety and soundness, enable revenue growth and drive efficiencies.”
It added: “In the rare instances that we detect any fraudulent activity, whether internally or by a vendor, we take immediate action to hold those responsible accountable for their actions.”
In September 2024, the company has warned employees and is considering stricter oversight of contractors about fraud and unethical behaviour.
The bank’s strategy includes reducing the number of external suppliers and relocating IT operations to locations such as New Jersey, New York, and Irving, while maintaining low-cost centres in Chennai, Belfast, and Warsaw.
Additionally, Citigroup plans to consolidate its IT team in Jersey City next year, moving away from Rutherford, New Jersey, where it will maintain other departments.
For the full year of 2024, the company’s net profit reached $12.7bn, marking a 37% surge from 2023.
