Citigroup recently found itself at the centre of attention after an extraordinary error led to a customer’s account being credited with a staggering $81 trillion, an enormous deviation from the intended $280. The incident, which occurred in April of the previous year, shows the operational challenges the financial institution continues to face, despite ongoing efforts to rectify such issues.
According to reports, the mistake was initially missed by two members of staff before being spotted approximately 90 minutes after the transaction was processed. It subsequently took several hours to reverse the erroneous transfer. Fortunately, no funds actually left Citigroup, and the incident was reported to both the Federal Reserve and the Office of the Comptroller of the Currency (OCC) as a “near miss”—a term used when an incorrect amount is processed but the funds are recovered.
In a statement released to Reuters, Citigroup explained that its “detective controls” were able to promptly identify the input error between two ledger accounts, leading to the reversal of the entry. The bank asserted that the incident had no repercussions for either the bank or the client.
A Citigroup spokesperson also told Business Insider that preventative controls would have stopped any funds from leaving the bank.
The sheer scale of the error is difficult to fathom. The $81 trillion figure dwarfs the gross domestic product (GDP) of every country on Earth, including the United States, which has a GDP of $29.72 trillion. It also exceeds Citigroup’s market capitalisation of around $147 billion by a considerable margin. According to Yahoo Finance, the erroneous amount was over 1.5 times the total market capitalisation of the entire S&P 500.
This is not the first time Citigroup’s internal controls have come under scrutiny. In 2020, the bank mistakenly sent $900 million to creditors of Revlon, which led to a protracted legal battle and a $400 million penalty from the OCC. As a result, the bank was fined $136 million the previous year for not adequately addressing data management issues.
Anna Kooi, who leads the national financial services and institutions practice at Wipfli, told Yahoo Finance that the error is a glaring alert that operational risks remain a significant threat in banking. She added that the failure of two employees to catch the error suggests possible deficiencies in training, alert systems, or a culture of complacency regarding due diligence.
The incident is a setback for Citigroup, which has faced regulatory scrutiny for its risk management and operational practices for years. While CEO Jane Fraser has prioritised improvements to risk and control, the $81 trillion error suggests that the bank has not yet fully addressed its operational shortcomings.
The bank is currently undergoing a “Transformation” initiative, which aims to eliminate manual tasks and improve automation, in an effort to safeguard its risk controls.
According to an internal report seen by the Financial Times, Citigroup experienced ten near misses involving amounts of $1 billion or more in the past year, a decrease from 13 such incidents the year before.