A routine $280 payment into a customer’s account at Citigroup spiraled into an $81 trillion mistake last April, highlighting significant flaws in the bank’s operational systems. The error, which was corrected within hours, has drawn scrutiny as Citigroup struggles to prove it has resolved long-standing internal issues.

The mistake occurred during a manual entry process when a payments employee failed to delete pre-filled zeros in a backup system’s transaction field. A second official assigned to review the entry passed the error undetected and was only flagged 90 minutes later by another employee monitoring account balances.

Citigroup disclosed the incident, known as a “near miss,” to the Federal Reserve and OCC. While no funds left the bank, such near misses—where incorrect transactions are caught and reversed—underscore vulnerabilities in operational controls.

Patterns of Operational Failures

This latest misstep adds to Citigroup’s troubling pattern. In 2024 alone, the bank reported 10 near misses involving $1 billion or more, according to an internal report. These incidents follow a series of high-profile mistakes, including the erroneous $900 million payment to Revlon creditors in 2020.

The Revlon incident, which resulted in regulatory fines and litigation, exposed systemic weaknesses in Citigroup’s processes and prompted the departure of then-CEO Michael Corbat. Jane Fraser, who took over as CEO in 2021, has since prioritized addressing these issues. However, progress has been slow, with the OCC and Federal Reserve fining Citigroup $136 million last year for failing to meet compliance standards.

A System in Need of Modernization

Citigroup attributed the $81 trillion error to a combination of manual processes and a cumbersome back-up system. The payment, originally intended for an escrow account in Brazil, became stuck in the bank’s system due to a sanctions screen. Employees were instructed to use a rarely accessed interface that pre-populated transaction fields with 15 zeros, a design flaw that contributed to the mistake.

“Despite the fact that a payment of this size could not actually have been executed, our detective controls promptly identified the inputting error,” a Citigroup spokesperson said, adding that the bank is working to eliminate manual entry and automate its systems.

Implications for the Banking Sector

Former regulators and industry experts agree that near misses of this scale are unusual across the banking industry. They argue that Citigroup’s recurring issues highlight a broader need for modernization and robust oversight in financial institutions.

“Errors of this magnitude shake public confidence and underscore the importance of operational resilience in banking,” one expert said.

Citigroup’s Path Forward

As Citigroup continues its efforts to address these challenges, the stakes remain high. Regulatory scrutiny, coupled with the need to regain stakeholders’ trust, places significant pressure on the bank to modernize its systems and improve oversight.

The $81 trillion incident serves as a stark reminder of the risks posed by outdated processes and the importance of accountability in the financial sector. For Citigroup, the road to recovery hinges on its ability to turn lessons from these near misses into meaningful reforms.

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