Citi shuffles consumer unit; fintechs embrace subprime cards

Receiving Wide Coverage ...

Shake it up: Jud Linville, head of Citigroup’s global cards and consumer services unit, is leaving the bank as it reorganizes its consumer banking operation. Anand Selva, a 26-year Citigroup veteran, has been named head of U.S. consumer banking, a new position, where he will be responsible for retail banking, wealth products and Citi-branded cards. In addition, David Chubak, who has been head of global retail banking, was named head of retail banking and consumer lending, also a new position, which unites global retail banking and branded cards. Wall Street Journal, Financial Times, American Banker

Wall Street Journal

Into the void: Financial technology startups, including LendUp, Fair Square, CreditShop and Elevate Credit “are stepping into a void increasingly left by credit-card-issuing banks: lending to customers with poor credit histories.” But the newbies are getting help from some credit card “industry stalwarts.” Fair Square is backed by Orogen Group, which is headed by former Citigroup CEO Vikram Pandit, while Capital One co-founder Nigel Morris and its former chief credit officer Frank Rotman recently joined LendUp’s board of directors.

Andrew Harrer/Bloomberg

Back to the future: The Bank of China is increasing its investment in financial and blockchain technology. “U.S. banks have generally lagged behind their counterparts in China when it comes to the use of blockchain and other disruptive technologies,” according to Kevin C. Desouza, an Australian business professor.

Financial Times

Trading like watching TV: UBS is considering using technology to help it “suggest trades to its asset management and hedge fund clients," much like the recommendation algorithms "used by a host of consumer technology companies.”

“Imagine what the world looked like when you watched television and had to scan through channels, whereas now it is not only on demand, it is presented to you so you easily find what you are looking for,” said Giuseppe Nuti, head of data science in UBS’s Strategic Development Lab. “That’s what we are trying to do for our clients, presenting them with a choice of likely, interesting trades.”

Elsewhere

Time to go: Barclays has begun moving direct ownership of its French, German and Spanish branches from its U.K.-based unit to its Irish bank, Barclays Bank Ireland. “The move shows Barclays putting its Brexit contingency plans into action, in common with other banks which are not waiting for the outcome of negotiations over how financial services will operate after Britain leaves the EU in March,” Reuters reports. The bank will also eventually transfer ownership of its French, German, and Spanish branches to the Irish bank. Last week, HSBC said it is moving ownership of several of its European branches to France.

Long arm of the law: Zuercher Kantonalbank, a Swiss bank, has agreed to pay about $98 million to settle U.S. Justice Department charges that it helped wealthy Americans avoid paying taxes by using undeclared Swiss bank accounts. Two bankers at ZKB also pleaded guilty to a single misdemeanor conspiracy charge.

Quotable

“This action aligns the U.S. franchise with the regional model deployed in Asia and Mexico where we have seen the benefits of cross-product synergies, greater collaboration and accelerated speed to market and decision-making.” — Stephen Bird, Citigroup’s CEO of global consumer banking, about the realignment of the bank’s U.S. consumer unit.