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Citigroup’s near US$6B wealth account transfer mistake — caught just in time … again
Citigroup nearly transferred US$6 billion (S$8.08 billion) to a customer’s account after an employee handling the transfer mistakenly copied and pasted the account number into the wrong field — for the US dollar amount.
According to Bloomberg, the near-miss error, which happened in the bank’s wealth management business, multiplied the intended amount more than a thousand times. It was caught the next business day, according to sources familiar with the matter.
The mistake happened in April, the same month Citigroup mistakenly credited US$81 trillion to another client.
The US$6 billion error was reported to regulators and caused frustration within the company, especially for Mr Andy Sieg, the company’s head of wealth, said anonymous sources.
Executives were in discussions with higher-ups about how to handle the situation when they learned of the much larger US$81 trillion mistake.
Citigroup said it quickly identified and corrected the mistake, which had no impact on the bank or the client.
The firm has since put stronger checks in place to prevent similar errors, including reducing manual processes and increasing automation.
Sources said the company has introduced a tool to check unusually large payments and transfers.
In January, CEO Jane Fraser lowered a key profitability target, partly because the bank had to spend more on its “transformation” plan to improve operations and address regulatory concerns.
The latest fund transfer errors reminded executives of Citigroup’s 2020 Revlon incident—when the bank mistakenly sent over US$900 million to the cosmetics company’s creditors and recovered it more than two years later after a lengthy legal battle.
Sources said the US$81 trillion credit involved an attempted transfer between internal accounts, reducing the risk, according to the Financial Times.
The US$81 trillion credit was caught about 90 minutes later and was so large that the funds couldn’t have left the account, the Financial Times reported. According to another source, the process behind the incident has since been fully automated.
