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Investing.com -- Citigroup Inc (NYSE:C). narrowly avoided an erroneous transfer of approximately $6 billion to a client’s account due to a data entry mistake, according to a report from Bloomberg. The incident occurred when an employee accidentally copied and pasted the account number into the field meant for the dollar amount. The error, which occurred in April, inflated the intended transfer amount by more than a thousand times.
The mishap was detected on the following business day in Citigroup’s wealth-management division, according to sources familiar with the matter. This incident occurred in the same month when another part of the bank mistakenly credited $81 trillion to a different client.
The error in the wealth division was reported to regulators and caused notable frustration within Citigroup, particularly from Andy Sieg, who had recently joined to head the unit. The news of the larger $81 trillion mistake provided some relief to managers dealing with the $6 billion error.
In response to these events, Citigroup has implemented a companywide tool to scrutinize large, unusual payments and transfers. In a statement, the bank mentioned that it had promptly identified and corrected the inputting error, which did not impact the bank or its client. Furthermore, Citigroup has put in place enhanced preventative measures consistent with its ongoing efforts to automate controls and eliminate manual processes.
These incidents underscore Citigroup’s continuous efforts to improve risk management and control systems. The bank has been working on these improvements following regulatory penalties and restrictions due to inadequate systems. In January, CEO Jane Fraser reduced a primary profitability target partly because the bank needed to invest more in its transformation. This plan aims to revamp operations and address regulators’ concerns.
The recent error reminded wealth executives of Citigroup’s infamous incident with Revlon Inc. in 2020. The bank had mistakenly transferred over $900 million to the cosmetic company’s creditors, a mistake that took over two years and a lengthy legal battle to rectify.
However, both the $6 billion and the $81 trillion errors were related to attempted transfers of funds between internal accounts, thus reducing the risk to the bank.
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