Citi CEO Jane Fraser on the next phase of her turnaround: To be the best, Citi has 'to beat the best'

Citi CEO Jane Fraser on the next phase of her turnaround: To be the best, Citi has 'to beat the best'

Recently, Citigroup achieved its highest third-quarter revenue in a decade, further illustrating the effectiveness of CEO Jane Fraser's turnaround strategy. As the first female CEO of a major Wall Street bank and ranked No. 1 on this year's Most Powerful Women list, Fraser spoke virtually at Fortune's Most Powerful Women Summit on Wednesday about her approach to maintaining this positive trajectory.

"We're definitely in the more enjoyable phase of our journey. A significant portion of the heavy lifting is behind us," Fraser remarked during her discussion with leadership editor and MPW Summit co-chair Claire Zillman. "Now I have urged the firm that if we aspire to be the best in the sectors we operate, we must surpass our strongest competitors."

"This mindset of excellence marks the next chapter of our journey," she elaborated.

Since taking the helm in 2021, Fraser's primary mandate has been to streamline Citigroup's complex global structure. She has restructured the bank into five primary business segments, eliminated management hierarchies, and commenced the gradual withdrawal from consumer banking operations in 14 markets outside the United States. The comprehensive overhaul also includes plans for 20,000 job reductions expected to be completed by 2027.

Reflecting on her leadership five years in, Fraser shared in an interview earlier this year with Zillman: "I believe you can make difficult decisions without being harsh." On Wednesday, she linked this principle to a restructuring effort within Citi's mortgage operations. She emphasized that employees prefer to hear "the hard truth" alongside the actions the company will take to support them.

"You don't need to be tough or unpleasant about it, but you must be straightforward," she noted.

'Move fast and retain trust'

Citi's future direction, like many organizations, is significantly influenced by the impact of artificial intelligence. Fraser articulated three primary benefits that AI brings to the bank: it can facilitate revenue generation, cost savings, and bolstering security protocols.

"We need to move swiftly while retaining trust," she stated.

One notable innovation is an AI avatar agent for Citi's wealth management division, developed in collaboration with Google DeepMind’s team. This virtual agent is capable of interacting with clients around the clock, allowing "our bankers, hopefully, to enjoy some much-needed rest," Fraser remarked, further clarifying that "it's not a replacement for team members."

The potential effect of AI on Citi's workforce remains uncertain.

"Honestly, we don’t know yet," Fraser admitted, describing the "puts and takes" involved, as some jobs may be created while others become automated by technology.

Speed is also crucial when considering risks associated with AI.

"When you’re innovating quickly, risk management must occur at that same pace," she emphasized, noting the collaborative efforts among large banks to identify and remediate vulnerabilities.

"You don't compete on cybersecurity; you collaborate on it," she added.

Citi has mandated AI training for 175,000 employees, focusing particularly on skill development in crafting prompts.

"I never believe that people perform optimally when they are in a state of fear," Fraser concluded.