Online Reporter
IMAGINE suddenly getting a notification on your mobile phone that your bank account has been credited with US$81 trillion when you were expecting a payment of just US$280?
How will you react and what will you do? Well, that’s what happened to a Citigroup client in the United States after the bank erroneously credited US$81 trillion, instead of $280, to the customer’s account.
The bank took hours to reverse the transaction, a “near miss” that shows up the bank’s operational issues it has sought to fix, the Financial Times reported.
The error, which occurred last April, was missed by a payments employee and a second official assigned to check the transaction before it was cleared to be processed the next day, the FT said, citing an internal account and two people familiar with the event.
A third employee caught the error one-and-a-half hours after the payment was processed and the transaction was ultimately reversed several hours later, FT said.
No funds left Citi, which disclosed the near miss — when a bank processes the wrong amount but is able to recover the funds — to the Federal Reserve and the Office of the Comptroller of the Currency (OCC), the report said.
Citi told Reuters in an emailed statement its “detective controls” promptly identified the inputting error between two ledger accounts and that it reversed the entry, adding the incident had no impact on the bank or the client.
There were 10 near misses of US$1 billion or more at Citi last year, down from 13 the year before, according to an internal report seen by the FT.
Citi declined to comment to FT on this report.
Last month, Citi CFO Mark Mason said the bank is investing more to address its compliance issues, referring to regulatory penalties for risk management and data governance.
“We saw the need to invest more in the transformation on data, on technology, on improving the quality of the information coming out of our regulatory reporting,” Mason said.
Last July, Citi was fined US$136 million for insufficient progress in tackling those issues and in 2020, it was fined US$400 million for some risk and data failures.
This followed the accidental transfer of US$900 million in 2020 to Revlon creditors due to human error and outdated technology. — H-Metro Reporter/Reuters
