66 M C K I N S EY Q UA RT E R LY - - - - - - - - EK : Can you give us a sense of the magnitude of change you’ve been driving at Citi in your time as CEO? What have you been doing—strategically, around where you compete, and operationally, around how you compete? JF : We were all things to all people everywhere, and that’s not a viable business model for where the modern world and economies are heading. We decided we would focus on where we felt we had a distinctive competitive advantage and eliminate where we didn’t. We’re a bank that does business in 180 countries, operating as a local bank in almost 100—and have done so for a century in many of these markets. That is our source of differentiation, and our people are unique in their global mindset. For me, the clarity was that we really had to drive toward modern excellence as the preeminent part ner for clients who had cross-border needs—to tap into global investment markets, global capital mar kets, global supply chains, and so on—and that we would be the bank that provides the modern infra structure to support those clients. The heart of the strategy revolves around what we call our services business, which is really sup porting the working capital of clients. We move $2 quadrillion a year, with 6,000 multinationals around the world. We do that in a digitized, now increasingly blockchain, multidimensional network. So that’s quite a remarkable capability; it’s the lead ing one in the world, and we’re constantly innovat ing. Linked to this are our trading businesses, which support these clients. If you think of multinational companies, they have to hedge foreign exchange, interest rates, commodities; they need to do capital raising in different countries across all those dimen sions, and that’s the banking business. Then we help entrepreneurs—the world’s progress makers and changemakers—we’re the wealth manager of these entrepreneurs, business leaders, and owners. It’s a singular client base, and we sold all our local businesses and focused on those that could operate on global platforms. That enabled us to radically simplify the entire organization’s struc ture. We took out four layers of the company. We took out the local complexity from how we manage businesses; because they’re now run on global platforms, we don’t need to do a country plan every single year for every geography. We stan dardized everything onto a single platform, with single processes everywhere around the world. Now we can run the bank almost on a grid, looking at the same data across and down the bank. That’s what we’ve spent the last five years doing, and now we’ve got a bank that is very much on the front foot and clear about the strategy and direc tion: We help clients operate globally, help them grow, help them with the financing, the structur ing, and the other elements around it. Instead of being all things to all people, we’re all things that are needed for a multinational company to grow and prosper, and we provide the same for the individuals behind those organizations. ‘Now we’ve got a bank that is on the front EK : You mentioned blockchain. Can you give an example of where you’re using this as part of the digitization strategy? JF : When I think about the future of the payments network, I get very excited about tokenization. With coin, you have tax, you have accounting, you have AML [anti–money laundering], you have all these other complexities to deal with, let alone the on-off ramp, which is a 7 percent transaction cost. And with coin, it’s very hard for a country to control its capital account because of FX [foreign exchange] controls. I think tokenization of markets is the future. We’ve just linked our 24/7 clearing to our toke nized capabilities. So now we can move money from your bank account with us in New York to London, and then to your HSBC account in London or your Lloyds Bank account in London, all instantly. That’s really the use case—multimarket, multicur - - - - - CEO Interview: Jane Fraser