Citi tech tweaks halt UK online ETF purchases
Citigroup has halted online purchases of exchange-traded funds for UK customers pending system improvements, the latest in a series of technology issues affecting the US bank’s business.
Over the weekend, customers with wealth management accounts were told they could no longer make low-cost fund purchases online for “operational reasons”, according to a customer advisory seen by the Financial Times.
Instead, customers will have to place orders over the phone with a customer service representative. The suspension is due to a system improvement and primarily affects customers in the UK, according to a person briefed on the suspension.
Citi declined to comment.
The shutdown further underscores the technology overhaul underway at Citi following a series of incidents across its business, from wealth management to payments and trading.
Last month, a Citi trader made erroneous trades in European stocks, a move that was later blamed for causing a mini flash crash. In the summer of 2020, a so-called fat finger error led to the repayment of a $900 million loan to the lenders of Citi’s client, Revlon, instead of the scheduled interest payment of less than $8 million.
The Financial Times reported this month that Citi also suffered a technology glitch at the height of the market panic at the start of the coronavirus pandemic that left it relying on the grace of an exchange clearing house. to prevent it from defaulting on margin payments for derivative contracts. .
To address the issues, Chief Executive Jane Fraser has earmarked $11 billion for technology spending in 2022, one of the largest budgets in the banking industry.
ETFs that offer exposure to US stock markets are among the most popular purchases for retail investors, who are attracted by their low costs. They mainly track the big indices such as the S&P 500 and the Nasdaq 100, and the sector is approaching $10 billion in assets under management.