US banking giant Citi has cut $1.42 billion from its operations and technology budget at the mid-way stage of a three-year campaign to eliminate $3 billion in tech spending.
Don Callahan, Citi's chief administrative administrative officer, told Computerworld UK that the bank was moving forcefully to hit targets of slashing $3 billion from operational and technology costs by 2011.
The pledge to butcher IT budgets was undertaken by Citi CEO Vikram Pandit in April 2008, as the bank faced up to massive losses from subprime debts. One of Pandit's first moves was to centralise IT decisions in New York under Callahan.
Callahan told Computerworld that Citi was "well ahead of schedule" with the O&T savings. "We intend to be one of the most efficient operators in our industry, and we have made and continue to make significant progress against that goal."
While a quarter of the savings have come from the disposal of the bank's Smith Barney operations and its businesses in Germany, much of the rest has come from the consolidation of datacentres, elimination of duplication and legacy software and improvements in server utilisation and storage.
The bank is also expecting to reap big rewards from migrating its various credit card businesses onto a single IT platform and standardising its core banking technology in the US markets.
A clue to how the latter may be achieved slipped out in a conference call with Fidelity National Information Services last week.
"Citibank, which currently runs our core banking software in 30 countries around the world, has expanded its license and maintenance agreement to include its North American banking operations," Frank Martire, FIS's president and chief executive, said during the call.
The US bank currently runs Fidelity's Systematics program to process small business deposits in the East coast, but runs a patchwork of systems across the rest of its US operations. Analysts believe the bank is planning to expand the use of Systematics to other deposit-taking functions across the US and ultimately to shift all of its consumer lending and small business systems to the FIS platform.Citi: How we cut £900m from technology costs - Computerworld