The legacy consumer-banking systems at Citi in Asia Pacific were updated in the early 2010s, and the bank has begin to look to a new setup, said Vikram Subrahmanyam, managing director and Asia-Pacific chief information officer and head of operations and technology.
“Smaller-scale vendors may not have the full capacity to meet our needs,” he said. “We need to find the right solutions for multiple markets.”
There’s a limit to how fast a big bank like Citi can adapt to new technology. “We’re regulated and we can’t allow anything to break,” Subrahmanyam said. “But we want to become more agile. It’s easier around the peripheries, such as client engagement. But making the legacy systems cloud-ready, or deploying microservices to prepare for such a move – that’s harder.”
The bank is looking to upgrade using distributed-ledger technology in areas such as trade services, KYC for compliance, and processing securities transactions. And it is looking at more machine learning and other artificial-intelligence tools to automate more of what remains manual.
Third, he’s looking at cutting-edge tech such as 5G telecommunications to transform how Citi interacts with customers. And finally, everything has to be underpinned by the bank’s cybersecurity.
(The one area that Subrahmanyam isn’t planning to adopt: cryptocurrencies.)
Fintechs are becoming competitors to banks without the same degree of regulationVikram Subrahmanyam, Citi
Subrahmanyam, who is based in Singapore, has a massive scope of business units and functions that report into him. He is responsible for I.T., data, operations and technology at a regional level, across Citi’s corporate and investment banking, including markets, treasury and trade, securities services, wealth management, and retail banking.
More API partnerships
To achieve his goals, both in terms of positioning the bank for the next decade, as well as getting things done today, he is looking to partner more with external players, particularly through direct connectivity and data sharing.
The need for partners isn’t new, but it’s accelerating, in part because the fintech industry is pushing innovation much more quickly than banks can. “Banking is a highly regulated industry, but fintechs and large vendors are becoming competitors to banks without the same degree of regulation.”
This is especially true in cybersecurity. “It’s how we move our legacy I.T. infrastructure into a more cloud-friendly, containerized world, so we can be more flexible,” he said.
(An app that is “containerized” is one that can be adopted seamlessly among platforms. This portability makes containers especially useful for I.T. security, as well as for things like payment gateways.)
“Safety is of utmost importance, so we need people with a different mindset who can do more on the fly,” Subrahmanyam said. “We’re tracking new developments and new technologies that can move our digitalization needle faster.”
The implications of DevOps and partnering is that this is necessary for the bank to spin out new products and services, but at the risk of exposing it to third parties’ vulnerabilities.
Last year’s breach of Capital One in the U.S. by a disgruntled AWS employee is a case in point.
The future is more agile techVikram Subrahmanyam, Citi
Citi officials have told DigFin they have been reluctant to put customer data on public cloud. Subrahmanyam says that remains the case. Is he looking at other ways to secure such data, such as tokenizing it? He declined to say.
Security might be the priority for such a DevOps approach, but the process has immediate ramifications for the rest of the business.
“The future is more agile tech,” Subrahmanyam said, “with artificial intelligence-assisted decision making across a wider spectrum of products and services. That means more digitization, and more self-service” for customers.
For the CIO, it also means working more closely with the bank’s front offices, while pursuing the classic functions of a COO: using tech to automate and drive efficiencies, and dealing with regulators.
What is different, though, is the consolidation under Subrahmanyam of many initiatives that will come out of the back office to impact the front.
Some of these changes have yet to strike. “5G will change banking,” he said. “This will transform the way customers engage with us, and the experience we can provide.” But for Citi, it’s still wait and watch how trends like the Internet of Things plays out.
A more immediate trend is the changing nature of hardware, as more of it blurs into the world of software, such as FPGA (field-programmable gate array) for low-latency trading. “We’re seeing volumes of transactions increase exponentially,” he said. “The software has been built to handle this, but are all parts of the hardware connected, and can we handle these volumes?”
Such developments originated with capital markets tech, but is now bleeding into other businesses, such as consumer banking and treasury services. Citi is addressing these issues now, he said. “We are confident that we can handle the volumes.”