(Bloomberg Markets) -- In September, Jane Fraser shattered the financial industry’s ultimate glass ceiling when she was named the next chief executive officer of Citigroup Inc., one of the world’s three most important banks. Weeks later, she was saddled with regulatory homework by the U.S. Federal Reserve and the Office of the Comptroller of the Currency, which said the bank must update its technology and systems to better manage risk.

Born in Scotland, the 53-year-old Fraser comes to the job with a gold-plated résumé: degrees from Cambridge and Harvard and career stops at Goldman Sachs Group Inc. and McKinsey & Co. before she joined Citigroup in 2004. There she served under three CEOs as the New York-based megabank grappled with losses, bailouts, and strategic repositioning during the Great Recession and its aftermath. She helped as the company disposed of almost half of its assets and cut tens of thousands of jobs, an experience she says will guide her in managing future challenges.

As she prepares to take over in February, Fraser says she is planning to invest in some of the bank’s largest businesses, including its sprawling custody network and its burgeoning wealth management effort. In mid-­November, as Covid-19 cases were spreading rapidly, she spoke with Bloomberg Markets via videoconference from her office in New York about her career and her thoughts on the future of finance.JENNY SURANE : To start, I’m very curious what it’s been like to experience this huge career change at a crazy time like this. It’s probably not what you were expecting.

JANE FRASER : It is an interesting time because I think Covid has changed quite a few things. It has certainly accelerated digitization. It’s changed the structures of our clients’ industries. It’s changing our own industry faster than we thought would happen. So you’re trying to bring a fresh perspective to what the firm will be focused on in terms of strategy, but also thinking about our people, thinking about the macro environment, those other dimensions. It’s sort of been a confluence of good timing to think all of those things through.

But I also think it’s been quite a divisive period. We’re certainly worried there’s a bit of a K-shaped recovery coming out of Covid. Banks are going to play a very important role in helping to drive the recovery. We do anticipate it to be quite sluggish. We’re certainly seeing it in consumer [banking]: You’ve got the “haves” and you’ve got those who are really struggling. I think it goes to that sense of, what are the values of the industry? How do we make sure we’re part of the solution? Not just from the financial market perspective. I think we all learned many lessons out of the last crisis about what a bank really is and [the role it] needs to play.

So it’s digital. It’s about humanity. There’s obviously the [environmental, social, and governance] agenda, but in a real way—not a plaque on the wall or just nice statements. And Mike [Citigroup CEO Michael Corbat] has given me a huge gift in terms of a good time of transition. He’s been a leader of such integrity in the bank. His legacy is going to be thought of in [terms of] where we were coming out of the crisis to where we are today—it has been pretty remarkable. Big shoes to fill. The apprenticeship I have had with him over the last couple of months and going forward has been very helpful because it means it’s not such a jolting transition for the firm.

JS : I was hoping we could also go way back and talk about your upbringing in Scotland. You’re only the second Citi CEO born outside the U.S. after Vikram Pandit, who was born in India. Does that give you a different perspective?

JF : We’re a very global bank. We’re firmly American, but we’re also very global. I actively chose to come and live in the States. But on the other hand, I come with the perspective of someone who’s lived all over the world and who’s seen the good, the bad, and the ugly around that.

I don’t think it makes a huge difference for Citi because a lot of the people’s careers in Citi have been in different businesses all around the world. I look at the management team and, you know, it’s a veritable United Nations. It is more of a global mindset. Globalization has had a bad rap of late. But there’s good and bad in everything. The global mindset is a positive one because it does make you not just think you’ve got a monopoly on the best way of doing things. You do tend to be very curious about how things are being done in other places. And that’s a lot of the mindset in the firm, and it’s a great one.

JS : Could you take me back to why you decided to join Citi in 2004 from McKinsey?

JF : Yeah, I think there were a couple of things. When I became partner at McKinsey, I worked part time all the years of my partnership. The kids were little, and my husband was sort of at the peak hard work part of his career as well. He’s 11 years older than me, as I like to remind him constantly. He says it makes him more wise. At that point [in 2004], the kids were at school, they were settled, and I was ready to go back full time. I loved McKinsey, but I was ready to not just advise but to actually do. I wanted to see if I could actually do rather than just write the presentation.

And what I loved about Citi is the globality of the place. It was similar to McKinsey—that global mindset of people from all over the world with different points of view and complicated, fascinating opportunities and issues to solve for clients.

It is a company that really helped companies and individuals to grow globally and to access global markets. What’s truly unique about the firm is that it doesn’t just do so out of global hubs, that it does so locally as well and really has an impact on the ground.

And I see it on different dimensions. We’ve given micro­finance [loans] now to 3 million women around the world. It’s happening at the grassroots level in countries all over the world, and it’s not a number you hear as often, but it’s a huge number. If you’re going to enable progress, a lot of this happens at a community level and at the local level. And I love the fact that we’re able to do both. Do the big global impacts, but also have the impact locally. It’s a bit quieter, but it’s often more impactful in some ways.

JS : Are there key moments from your career that you think really prepared you for this next role?

JF : Yeah, I think a lot of the time during the [financial] crisis. I had been working on [then-Chief Financial Officer] Gary Crittenden’s team with [current CFO] Mark Mason, Sara Wechter, who’s head of HR. There was a group of us who were part of that real crisis where we thought the system was going down. We were all in the corporate center, trying to set the strategy and help lead the firm through this. And there were several seminal moments.

I’d say one was with Vikram. We were sitting in one of the big conference rooms up at the old head office and Vikram’s there, and over the Sharpie and the whiteboard we just fully recognized that the firm had failed in many of the core missions. We’d forgotten to be a bank. We were sitting there saying, “OK, but there are some extraordinary things in the bank itself, assets and businesses.” And he basically said, “So if you’re starting from scratch, what would you pull from Citi?” And it was how we ­separated Citi from Citi Holdings [the unit that contained assets the bank no longer wanted].

And we started with the customer base—the ­multinationals—and said that’s what everyone wants from Citi. It’s a systemically valuable network that provides cash management, foreign exchange, trade, lending. That platform and that network globally would be almost impossible to replicate. And we basically built out what the firm was from there, and therefore what went into Holdings. And what went into Holdings, it was pretty bold: 48% of the assets of the bank at the time, 100,000 employees. It was a lot of businesses, some of which were really troubled from the financial crisis, but others that were just great businesses that didn’t really fit with his vision of what the firm was.

That’s something I try to bring every time: to mortgages, to the private bank when I ran it, to Latin America and Citibanamex [Citi’s Mexican bank]. You start with: What’s the vision of the future? What’s that growth, return, client story going to be? And then you go and solve for the rest. That really shaped me.

And I think the other piece that shaped me was just being bold, being courageous. You had to be very decisive, you had to take tough decisions, much better to take them early. If we hadn’t sold our German consumer franchise, if we hadn’t sold our big commercial real estate business—there were a lot of different businesses that we exited in 2007 and in early 2008, thank goodness, because when the crisis really hit, we would have had a much tougher time. So I learned to be much bolder. And if you make a wrong decision, you make another decision. Those were really the two things: What’s the vision? And be bold. Take those tough decisions. Gumption. I’m trying to bring the same values and thinking to the firm going forward.

JS : When I look at your path through the bank, there are a lot of recent stops on the consumer banking side. Does your elevation to CEO tell us anything about where Citi is looking for growth?

JF : Actually, I spent most of my career at Citi and before on the wholesale side. My first three years at Citi were in the investment and the corporate bank, and then corporate center, and then the private bank was in the institutional division. And so it was only in mortgages and then the retail bank that was my first time in consumer. And then in Latin America we sold our [retail] franchises in South America. And there we were really running a big institutional franchise, although obviously Citibanamex is much more retail. So I have actually had more of a wholesale and institutional focus. The same when I was at McKinsey. I’ve enjoyed learning more about the consumer franchise.

Look at the payments space going forward. I saw this in Latin America and a lot of geographies as we were digitizing the wholesale clients. Take [Argentina’s state-run] YPF, one of the big oil companies. We were digitizing their payment system from the gas pump all the way to the treasury. But we were starting to bring some of our know-how from the consumer side into that because wholesale and retail payments are converging.

So, having been involved in both sides of the business, you start seeing where the points of connectivity are as we look at how digitization is changing. I’ve benefited by working in ­different regions of the world and in different parts of the business.

When I first moved into mortgages, I knew nothing about mortgages. So one of the pieces I certainly learned is that you have to get a team around you who knows more than you do, and who are stronger subject matter experts, and then get them to work well and flourish together. I now have the confidence to do that, otherwise you’re not going to succeed.

JS : I did want to drill down into your experience in Latin America because that was the role you held the longest and that you had before you were named president and put on this path to becoming the next CEO. Did that step feel like a career risk, or was it more strategic? You flew under the radar there for a little while.

JF : One of the best pieces of advice I ever got was, don’t think about what are the jobs that will get you to the more senior job. Think about the experiences and the roles that will make sure that once you’re in something [bigger], you’ll be much more successful at it. When I went from the private bank to mortgages, a lot of folks were questioning why. But it was because it gave me exposure to different risks. I hadn’t managed unsecured risk before. I hadn’t had a lot of experience running an organization more focused around ops [operations] and tech. I hadn’t had a lot of regulatory experience and working with [Capitol] Hill or with the board and getting exposure there.

And then obviously emerging markets in Latin America. When I was down in LatAm [from 2015-19], we had the ­Venezuelan crisis. Negotiating with the government there was not easy. [We were] making sure our people were safe. We’d been in Venezuela a century, and a lot of multinationals depended on Citi’s presence there. We worked through the crisis in Argentina, which was a major financial crisis. We had the Brazilian depression—they had the worst economic conditions in a century.

But a lot of the time in Mexico was [figuring out] how to take what was an iconic bank, but one that was challenged, and bring it into a much more modern era, a more modern culture, and reinstill the pride and the purpose behind the work. It’s a similar approach to the work we’re doing now in response to the [U.S. regulators’] consent orders. What’s the vision of the bank? What’s this much more modern bank? And galvanizing the organization around the transformation agenda rather than just remediating issues in the order. We have a lot of support from the regulators and the board around that.

JS : What are you learning from the work you’re doing so far?

JF : One of the things has been “phone a friend.” I was on the phone talking to [CEO] Brian Moynihan at Bank of America and talking to [consumer lending division CEO] Marianne Lake over at JPMorgan. They’ve gone through similar transformations. When it comes to safety and soundness and these issues—we’ll be die-hard competitors on a deal or a pitch—but when something’s good for the whole financial system, there’s a more noble purpose in there. Talking to them has been very helpful. And having [chief administrative officer] Karen Peetz, who’s had experience from outside [as president of BNY Mellon Corp. and a board member at Wells Fargo & Co.].

The investments we need to make to satisfy the orders, we’re putting a world-class bar against them so that we’re actually really modernizing them for a digital era and that post-Covid world where all of those industry structures would have changed. So a lot of work on end-to-end business processes, a lot of cultural work as well. We just talk about excellence and how to make sure that we’ve got excellence in what we do for clients and what we do operationally and what we do from a risk and control perspective. And that’s a good bar. But it’s also one that feels in tune with the age where you get rid of the bling and just focus on the basics and make sure they’re really strong and make people proud. That’s the goal.

JS : Competitors admire Citigroup’s treasury and trade solutions network and your branch-light consumer model in the U.S. What other parts of Citi do you think deserve more attention?

JF : I think wealth [management] is certainly an area that Paco [Ybarra, CEO of the institutional clients group] and I have been looking at very closely. We look at Asia with Peter Babej, who’s our partner [and CEO of Citi business] out in Asia, we look at the growth in wealth that’s out there. Citi does have an iconic brand, an aspirational brand in Asia. The consumer franchises, particularly in Singapore and Hong Kong—a lot of that’s been around a wealth proposition.

We have our commercial bank around the world, which really helps entrepreneurs. There are $100 million companies in revenues today who will often be thinking in multiple geographies. So they need our platform and our network on cash management, foreign exchange, etc., to do that. So we help them. That’s often where the source of a lot of the wealth is being created—in those commercial bank relationships as well as the institutional division. We’ve got a really superb high-end private bank. So as we look at wealth, we see this as an opportunity to bring the consumer and the institutional business together in this space over the next few years. That’s an area that we think is underappreciated. It fits with the brand, with the history, with our strategic identity as a bank. So it’s one you’ll hear more from us on going forward.

Security services is another area. I saw that in Latin America. Our custody network was extraordinary there, and many of our competitors used our network around the world. It’s another ­underappreciated piece that we’ll be investing significantly in. Paco and the team have a great strategy there.

The same again in payments, as we see wholesale and retail coming together. That B2B2C [business-to-business-to-consumer] space is a pretty interesting one for us.

JS : It’s interesting how much wholesale banking has been ­influenced by the personal experiences of bankers and clients.

JF : The discussion we’ve been having is how spaces are changing and a lot of the linkages between different parts of the firm. ­Ironically, Covid helps. I certainly imagine everyone back in [the office]. I do think from a cultural point of view—apprenticeship, the sense of belonging—you are better together. But we’ve certainly learned that you can have a lot of collaboration on Zoom calls and the like. We’ve had to think differently because of Covid. You never thought you could have 20 traders running the trading floor in New York, with everyone else working from home. That was inconceivable in January. And yet, a few months later, that’s where we were. It’s really helped everyone think about businesses and where opportunities lie and industry structures. It really got accelerated. I know I’ve had to think differently.

JS : Who were your most important mentors along the way?

JF : Let’s start with Mike, because he’s had the most impact and certainly from him [I learned] what the bank stands for. He’s certainly taken tough decisions on getting comfortable with the uncomfortable in diversity, the pay gap, and [he’s chosen to be] radically transparent around that. He’s been a CEO who has huge ambitions for the bank but doesn’t have his own personal ego in there. And I think that’s very admirable. He will do whatever the bank needs him to do in the role.

And then from Vikram, you know, he would often bring the trader’s mindset. There were no favored children. It was that clinical, fact-based, objective decision-making on things. And he was brilliant around that. And that courage I learned, certainly. And God forbid with Vikram, if you went into his room without your HP-12C [calculator] of the day, because he could do the math in his head.

At McKinsey, Lowell Bryan was a fantastic mentor. He ran the financial institutions group there, and I worked with him. He was someone who really pushed me out of my comfort zone all the time. I’ve often said I wanted to be 120% prepared for everything, but that doesn’t push you to take more chances. When you do get pushed and you take those big leaps, that’s when you learn the most. And when you fail at something or you don’t do as good a job as you could have done, get comfortable picking yourself up and learning from it. That’s one of the things I like about the States. I wanted to bring my kids to the States for that reason. It’s that, OK, that didn’t go as well, pick yourself up and get on with it and go get ’em. I love that about this country.

JS : When you were named CEO, there was a huge outpouring of support from all over the banking industry and beyond. Were there any reactions that stood out to you as particularly important or meaningful?

JF : I loved the dads who were saying it was their daughter or even their sisters or wives, but particularly their daughters, that had texted them or talked about it. And, you know, I’m a working mom. I’ve had a phenomenally supportive husband, a very patient man, and great kids. But, nonetheless, I’m a working mom. And that just shows it’s doable without being superwoman. You can be yourself. And I think that’s something that is so important.

There are so many amazing women in financial services. They’re a really impressive group and a supportive group. All of us have great male mentors and supporters. I’ve been very fortunate to be the first, but I’m going to be the first of many.

[General Motors Co. CEO] Mary Barra has been super and gave me some fabulous advice. [U.S. Chairman] Tim Ryan over at PwC has been giving me some coaching sessions on weekends. And it’s not just because I’m a woman. There’s a bit of a sense of let’s help you along here, which is a great spirit. I think it makes you feel positive about capitalism, that it’s not just about profits.

JS : To wrap up, I’d love to hear about the moment you are ­proudest of in your career.

JF : One I really loved was when we put in place the QR code system for payments in Mexico. This started as Ernesto Torres Cantú, who was our Mexico head at the time, saying there’s a lot of people here who have been left behind, are not part of the banking system, and are really disadvantaged. We’d looked at India and seen from our partner there—Paytm and others—how quickly a QR code-based system [can take effect]. It doesn’t need to be that smart of a phone that is in everybody’s hands. And in the previous few years everyone had got a mobile phone in Mexico, but they didn’t all have a bank account. Working with the central bank in Mexico and then getting the other banks on board, we put in a national payment system that worked on the bank rails. It was therefore well-regulated. It would be fair. And transparent and equitable. But could make a huge difference.

There was a shoeshine guy who sits outside the building at Citibanamex. He was one of the first people we showed how to put the system on his phone. And a couple of months later, he said that he used to get robbed as he commuted home at least every six weeks. He would be physically attacked and his money taken. And he said, “I don’t get robbed anymore because it goes into a digital system.”

We’re a bank that can affect stuff at the local level as well as take the big global ideas. But when you can translate it to the local communities quietly is when you can actually make a difference. Those are those human moments where you realize this is the stuff it’s about.

Surane reports on financial companies, including Citigroup, in New York.

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