Fortune

CITIGROUP DOES ‘FINTECH’

AN EXPLOSION OF NEW FINANCIAL TECHNOLOGY STARTUPS IS THREATENING TO USURP THE MULTITRILLION-DOLLAR BANKING INDUSTRY. HERE, AN INSIDE LOOK AT HOW ONE GLOBAL PLAYER IS TRYING TO “FINTEGRATE” FAST ENOUGH TO STAY AHEAD OF THE REVOLUTION.

What he needed was a SWAT team. The week after being put in charge of Citigroup’s consumer banking business last year, Stephen Bird went to Silicon Valley to meet with venture capitalist Marc Andreessen and other tech luminaries in hopes of gaining insight on how to counter the challenge from “fintech”—the rapidly proliferating class of technology startups bent on disrupting every facet of the traditional financial services business. Together they represent perhaps the No. 1 threat facing large banks today.

It was Salesforce.com CEO Marc Benioff who gave him the idea. Benioff told Bird that he could never hope to change the culture or operations of a banking behemoth, with $1.8 trillion in assets, all at once. But if he put together an elite group within Citi, one that could operate with startup-like speed and agility, he might just get somewhere. Bird decided that to push big changes inside the company, he would first need to think small.

Today the skunkworks operation that Bird created, known as Citi FinTech, is made up of about 40 employees handpicked from various parts of Citi and poached from tech companies such as Amazon and PayPal. In keeping with the outsider mentality Bird wants, the operation is based not in Citigroup’s Manhattan headquarters but across the East River in Queens, on the 10th floor of a Citi building that also houses the credit card business. On one wall there’s a five-by-10-foot chart listing all of Citi’s new fintech competitors and which of the megabank’s business lines each startup puts in jeopardy—from payments to commercial lending to wealth management. Not far away is the requisite appurtenance of every startup: a foosball table.

But Bird, 49, is well aware that props alone won’t suffice if Citi is going to stay, in his words, “future compatible.” An 18-year company veteran, he began his

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