Citigroup Inc. nearly transferred about $6 billion to a customer’s account by mistake after an employee inadvertently copied and pasted the account number into the field designated for the dollar amount.
This near-miss, which occurred within Citigroup’s wealth-management division, resulted in an amount more than a thousand times larger than intended. The error was discovered the next business day, as per a Bloomberg report. The incident took place in April, the same month another part of the bank accidentally credited $81 trillion to a different client.
The report mentioned that the wealth division’s mistake was reported to regulators and caused frustration within Citigroup’s ranks, particularly from Andy Sieg, who had recently taken over the unit.
While executives were already engaged in discussions with senior management and regulators to address the error, news of the much larger mistake reached them, providing some managers with a bittersweet sense of relief.
However, Citigroup has introduced a companywide tool to help monitor large and unusual payments and transfers.
The Bloomberg report mentioned a statement, where Citigroup said it “promptly identified and corrected this inputting error, which had no impact on the bank or our client. Additionally, we have implemented enhanced preventative measures consistent with Citi’s ongoing efforts to eliminate manual processes and automate controls.”
The incidents highlight Citigroup’s ongoing challenges in improving risk management and internal controls following regulatory penalties and restrictions due to its inadequate systems. In January, CEO Jane Fraser lowered a key profitability target, partly because the bank had to allocate more funds toward its “transformation” plan, which aims to overhaul operations and address regulatory concerns.
For the concerned wealth executives, the error evoked memories of Citigroup’s infamous 2020 Revlon Inc. incident, when the bank accidentally transferred over $900 million to creditors of the cosmetics company. Citigroup eventually recovered the funds after a lengthy legal battle that took more than two years.
However, in this case, similar to the $81 trillion credit reported by the Financial Times last week, the mistake occurred in the transfer of funds between internal accounts, minimizing the risk to the bank.
In the larger incident, the error was detected roughly 90 minutes later, according to the FT. The amount was so large—far exceeding the firm’s total assets—that the funds could not have been transferred. The process involved in that incident has since been fully automated, according to another source familiar with the situation.