Morning Coffee: Citi bankers need to lose their remaining bad habits. The elite jobs that let you use a chatbot for interviews

Part of the skill of management is to know when to give your staff a pat on the back, and when to deliver a somewhat harder blow a bit lower down.  Accompanying Citi’s Q4 results, which appear to have underwhelmed the stock market, CEO Jane Fraser has sent out an all-employees memo which seems to have a bit more stick than carrot to it.

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She lays it on the line; now that the job cuts and transformation programs are coming to an end, Citi needs to be driving revenue growth.  And in a world in which domestic retail banking is now the focus of regulation, it’s hard not to see these words as directed mainly toward the investment bank:

“Every one of us has to adopt a more commercial mindset: asking for the business, competing for the full wallet, and not settling for a secondary role or missed opportunity. We are not graded on effort. We are judged on our results. And I expect to see the last vestiges of old, bad habits fall away, and a more disciplined, more confident, winning Citi fully emerge in 2026”

This presumably doesn’t mean that Citi will literally turn down secondary roles in transactions, but Vis Raghavan’s high profile hires are generally accustomed to being in the top left-hand corner of prospectuses, and Fraser seems to be putting them on notice that they are expected to deliver the goods. 

Straight talking like this often works in investment banking – we’re reminded of Jim DeMare’s famous “anyone who doesn’t have the ambition to do better ought to think about working somewhere else” speech, which is credited by many for beginning the turnaround in Bank of America’s fixed income trading franchise.  But they have to be backed up with action.

So far, Fraser has been good at giving Vis Raghavan the budget that he needs to transform the investment bank.  And she has said that “We're going to continue to bring in top talent to fill in remaining gaps”, in response to a question on the earnings call.  But Citi is still under pressure to keep costs down, and CFO Mark Mason has indicated that the aim is to “improve productivity and tools like AI” so as to bring down the overall headcount number.

Bankers can’t really be asked to give their whole attention to the client’s wallet if they’re not secure in their jobs.  It's not easy to keep both eyes on the prize while simultaneously looking over your shoulder.  And there are plenty of outstanding risks which might affect investment banking revenues next year in ways that have nothing to do with the diligence or hunger of its bankers.  So if Jane Fraser really wants Citi staff to give up their bad habits, maybe the top management team should make their own New Year’s resolution to give up the worst habit of all – that of trying to manage market cycles by cutting headcount.

Elsewhere, up until now it has been absolutely verboten to use LLMs in the interview process for most banking jobs.  Goldman Sachs sent out a special warning to candidates about the practice last year, for example.  But, the consultants at McKinsey asked themselves, if you’re going to be using chatbots all the time in the actual job, shouldn’t you be tested on your ability to do so in the interview?  And so, wannabe McKinseyites will be put through an exercise in using “Lilli”, the firm’s propriety AI “vibe-consulting” tool during their selection process. 

McKinsey seems to be the most committed of the big consultancies to AI – they were given a special award by OpenAI for the most tokens used last year. It doesn’t necessarily seem to have helped them all that much, but they’re still seen as having quite a bit of thought leadership.  So we should probably expect to see the other consultancies follow suit pretty soon, and then possibly the banking industry.

Meanwhile …

Representatives of the City of London are beginning a hand-holding campaign to try and communicate to nervous foreign bankers who spend too much time on social media that a lot of the AI-generated videos they see about London being a violent, chaotic and dangerous place are not necessarily accurate reflections of reality. (FT)

But Deutsche Bank’s Claudio De Sanctis thinks that the really rich aren’t scaredy cats.  He says that “My expectation is that a lot of these families that are moving will still look at London as the place where they want to have their banker, given its international scope and their international needs” and plans to specifically target the UK in his latest hiring push to add 250 more high-net worth advisors. (Bloomberg)

American middle market specialist Lincoln International has been quietly ramping up its European presence with 18 managing director hires and a couple of acquisitions over the last year or so.  Now it seems to be reaching the kind of inflection point where long-term rainmakers start leaving for new challenges – Alex Masters, co-head of European consumer coverage is going after eight years at the firm. (Financial News)

Odey Asset Management, once a force in the market before its founder’s euphemistic “fall from grace”, has bowed to the inevitable and will cease trading. Odey himself continues to deny the allegations and has an outstanding libel suit or two. (FT)

You can now get high-speed internet for a private jet, allowing CEOs to dial into Zoom calls from the air, and employees on those calls to ask themselves “didn’t someone say we all needed to be back together in the office?” (NY Post)

If you have absolutely painstaking attention to detail, don’t mind constant frustration and are prepared to go through a long and annoying apprenticeship with someone regularly telling you that your work isn’t good enough, then instead of being a junior banker, you could become a craft engraver at America’s oldest stationary firm. It only pays $60,000 a year, though. (WSJ)

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