Citigroup at Deutsche Bank Conference Notes

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Jud Linville – CEO, Citi Cards

Returns on capital strong in cards

“And then third, the returns are very attractive. I think first quarter we talked about a target somewhere between 2% and 2.5% return on assets, so I think 2% in a quarter, that’s on assets, on capital you can appreciate a kind of similar phenomenon. So we’re roughly at least 2x of what the target is for the Company. So, from a contribution standpoint, financially, I also think about this business as — this is the sharp edge of the wedge that can help restore the brand.”

This business has been big data for decades

” people talk about Big Data now and so this has been a business that’s been Big Data for decades, I can give you plenty of stories. To me the lack of analytic rigor around risk and discussion science, we’ve built up that I also feel very good about, that’s something that can transport globally”

Machine learning to help understand the massive amount of “information exhaust”

” whether it’s acquiring new customers, the cost of service existing, the embedded cost of fraud and the like, so this is one and having earlier life on customer service operations. I look at these as massive transaction processing businesses, the first and foremost customer service businesses that generate immense amount of information exhaust and if you know how to use that information exhaust, which we may get into the ability to use machine learning this business is just massive. Banks don’t talk about that a lot, a lot of folks in Silicon Valley talk about it more. I think there is more that needs to be done there.”

Digital is bringing costs down

” I get a benefit there as well, not just on a rate, that only gained on hey my costs are coming down mostly both rates and volume because as we move to digital servicing, it’s faster better cheaper, it’s not just about cost arbitration, I know, and this is where I think FinTech has done a great job of challenging the model of how bank serve. “