Most Powerful Women in Banking: No. 6, Citigroup's Jane Fraser

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CEO of Latin America, Citigroup

When Mexico elected a left-wing populist as its next president last summer, Citigroup initially looked like one of the big losers.

Foreign-owned banks were facing popular anger over high fees. Legislation introduced in November by the party of President-elect Andrés Manuel López Obrador would have banned banks from charging fees for ATM withdrawals, bank transfers and more.

The bill would have had a big impact on revenue at Citibanamex, the country’s second-largest bank.

But instead, López Obrador and Citi have found common ground during his nine months in office by focusing on ways to bring millions of cash-dependent Mexicans into the banking system.

“Cash has a very high correlation with corruption and inequality and violence,” said Jane Fraser, Citi’s CEO of Latin America.

Under a legislative compromise that López Obrador brokered, banks can keep charging most fees, but they must expand the services that they offer to Mexico’s middle class.

The Mexican president has also embraced a proposal that Citi brought to him as a candidate to allow consumers to make purchases by using QR codes on their mobile phones. The system, which has gotten buy-in from Mexico’s central bank and Citi’s private-sector competitors, is scheduled to launch in September.

“We’re hoping to bring 30 million people into the banking system through this capability,” Fraser said.

Under the new system, which is known as CoDi, Mexicans will walk into banks to load physical cash onto a mobile app that they can use to make purchases. Transactions under $400 will be free.

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Fraser said that Citi will lose a substantial amount of swipe-fee revenue under the CoDi system, but she noted that there will also be long-term gains from bringing new customers into the banking system.

Fraser is a 15-year Citi veteran who once served as CEO of the firm’s global private bank. She said that Citi’s proposal for QR codes in Mexico grew out of the bank’s experience in parts of Asia and Africa, where similar systems have sped the transition away from cash.

Peru and Colombia are now exploring the possibility of following Mexico’s example.

“This is the future,” Fraser said. “We’re just trying to make that future happen faster for the benefit of the financial system.”