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United Kingdom
The importance of proper training has been highlighted by Citigroup, which has identified a skills gap causing problems with compliance, risk, and data governance, according to an internal analysis by the bank.
Despite a multi-billion dollar overhaul, the bank faces persistent challenges with regulatory compliance, attributed to a lack of skills among employees that are affecting progress on key initiatives.
The issue may have been compounded by a major restructuring effort in September 2023, which included significant layoffs and a reduction in management layers.
The layoffs affected employees engaged in regulatory compliance tasks, potentially hindering the bank’s efforts to address the consent orders. Although Citi denied any negative impact from the layoffs, it confirmed that it is continuing to invest in areas like data, risk, and compliance.
Regulatory consent orders
The financial group has been under two regulatory consent orders since 2020, requiring improvements in risk management and data governance. A December 2023 analysis uncovered that many of the bank’s employees lack critical skills in compliance risk management, raising concerns about the bank’s ability to resolve those regulatory issues, which are required for the removal of the orders.
According to the document, Citi's training and assessment tools have been "insufficient" to meet those needs, making it difficult to close the skills gap.
Citi's CEO, Jane Fraser, emphasized the importance of resolving the bank's regulatory challenges and has pledged ongoing investment in training and development.
The bank’s skills gap is not limited to compliance, extending also to data governance. The analysis indicated a need for improvement in areas like data analytics and digital literacy, while Citi’s curriculum reportedly lacks sufficient focus on essential technical skills. The bank also acknowledged that it hadn’t clearly defined the required skills for some compliance roles, making it difficult to assess whether employees are adequately prepared.
In July, Citi faced fresh regulatory reprimands and fines from the Federal Reserve and the Office of the Comptroller of the Currency (OCC), both of which criticized the bank for its slow progress. The OCC additionally required Citi to implement a quarterly review process to ensure that resources are appropriately allocated to meet compliance milestones.
The importance of skills-based learning
The focus on skills training is particularly crucial in industries like finance, where compliance and data security are integral to operational stability. A lack of skills in these areas can leave a company vulnerable to regulatory penalties and data breaches, which can damage both its reputation and financial standing.
Properly trained staff are essential to maintaining the security protocols necessary to safeguard sensitive data, a growing concern as cybersecurity threats increase.
The ongoing challenges at Citi underscore the importance of a well-trained workforce, particularly as the bank seeks to streamline operations under Fraser's leadership. Without addressing its skills gap, Citi risks further delays in resolving its compliance issues, which could have broader implications for its ability to remain competitive and secure in an evolving regulatory landscape.
