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How to be ‘digital first, but not digital only’

October 27, 2021, 10:32 AM UTC

Good morning,

A mobile banking app was nonexistent almost 200 years ago when Citizens Financial Group, Inc. was founded in 1828. The financial services firm has evolved digitally with the times, yet holds on to its roots of traditional, in-person banking, John F. Woods, vice chairman and CFO at Citizens, told me. “We haven’t given up on the bank branch,” Woods says. 

The Rhode Island-based firm, led by chairman and CEO Bruce Van Saun, trades on the New York Stock Exchange under the ticker CFG. On October 20, Citizens released its third quarter report for 2021. The company posted net income of $530 million, compared to $314 million in the third quarter of 2020. For the quarter, the firm’s revenue fell to $1.66 billion compared to $1.79 billion in the third quarter of last year. But that exceeded expectations as analysts were looking for $1.64 billion, according to MarketWatch. Citizens reported more than $187 billion in assets. 

Digital booked sales are up 24% year over year, mobile active users are up 20%, and the number of Zelle transactions, person-to-person payments, are up 34%, Woods says. “As part of the pandemic, I think we saw multiple years of mobile adoption happening in a compressed period of time,” he says. “I would describe our approach as omnichannel. We’re digital first, but not digital only.” When it comes to complex financial services, like “financial planning, from a wealth standpoint, or even opening a checking account,” customers still want to do that in person, Woods says, referencing Citizens’ banking experience survey

The company announced in July a deal to buy Investors Bancorp, a New Jersey-based bank holding company, for $3.5 billion. In May, Citizens said it would acquire the national online deposit business from HSBC Bank and 80 East Coast branches — 66 locations in the New York City Metro area, nine locations in the Mid-Atlantic/Washington D.C. area, and five locations in Southeast Florida.

“When we saw HSBC was available, we put that together with Investors, and saw that we could get to a top 10 position in the largest market in the United States, the New York City Metro area,” Woods explains. “These [acquisitions] were really done as a as a pair. We thought it was an excellent opportunity to become more relevant in a place that we know well from a lending perspective.”

In 2021, M&A has been on the rise as companies have embarked on substantial deal sprees, according to global research by Willis Towers Watson. Citizens’ major bank acquisitions were announced in 2021, but it was a long preparation process, Woods says. 

Citizens became a public company in 2015, and post IPO hadn’t yet done much M&A. “It takes a number of years to build the internal capabilities and to sharpen your strategic objectives in order to know that an M&A transaction actually delivers on a strategic gap that you’ve identified,” he explains. The company knew four or five years ago that there was a benefit in acquisitions between Philadelphia and Connecticut, “but you can’t just close all gaps overnight,” Woods says. With preparation, “we were able to move quickly when HSBC and Investors became available,” he says. The company also acquired JMP Group and Willamette Management Associates this year.

Woods joined Citizens in February 2017, became EVP and CFO in March 2017, then was named vice chairman of the bank in February 2019. He was previously a CFO at MUFG Americas Holdings Corporation, Union Bank, and CFO of home lending at JPMorgan Chase, to name a few. I asked him how the role of finance chief has evolved. “I’d say, maybe just decades ago, the role was very transactional; there was a heavy dose of accounting presumed in the role,” Woods says. “I think the evolution has been toward strategy and business partnering.”

See you tomorrow.

Sheryl Estrada

Big deal

Mercer’s 2021 Inside Employees’ Minds report takes a look at what has been termed “The Great Resignation.” There’s a divide between what employees want and what employers are planning in regard to workplace flexibility, the report found. For example, 44% of employees surveyed want full-time remote work, compared to 16% of employers who are in support of it. Employers "risk attrition if they don’t embrace the flexibility and autonomy people have come to expect," according to the report. Mercer, an American asset management firm, offers key steps to help employers navigate the war for talent. The findings are based on a survey of over 2,000 U.S.-based employees.

Courtesy of Mercer

Going deeper

SHRM (the Society for Human Resource Management) released a report on October 25 that examines pay equity practices. About 58% of organizations surveyed voluntarily conduct pay equity reviews to find possible pay differences between workers performing similar work, according to SHRM. The majority of companies (83%) adjusted employees' pay following a pay equity review, based on a surveys of HR professionals and American workers. However, companies with 5,000 or more employees (78%) are more likely to conduct pay equity reviews than those with fewer than 100 employees (48%). And companies with a female owner or CEO are more likely than those with a male owner or CEO to conduct pay equity reviews or audits (67% compared to 55%), SHRM's research found.


George Gresham was named CFO and member of the board of directors at Green Dot Corporation (NYSE: GDOT), a digital bank and fintech. Gresham previously served on the boards of directors of both Green Dot Corp. and Green Dot Bank from 2016 to 2019. He was previously CFO at NetSpend Holdings, and also served as CFO and EVP at Global Cash Access (GCA Holdings, Inc.), and CFO and chief administrative officer at EFD (eFunds Corporation). 

Alexander (Alex) Pease was named EVP and CFO at WestRock Company (NYSE:WRK), a paper and packaging solutions provider. Pease will succeed Ward Dickson, who will retire from the role, effective November 30, 2021. Pease has served in the CFO role for three public companies, most recently at CommScope Holding Company, a telecommunications and networking equipment technology company. Prior to transitioning to his finance leadership roles, Pease spent more than 10 years with McKinsey & Company in a wide range of advisory roles, before departing as a partner in 2011. Pease also served as a US Navy SEAL from 1994 to 2000, eventually departing as a Platoon Commander in 2000.


"Fear of stranded assets, fear of being divested, fear of being booed out, or fear of failure to attract talent, for instance, or a failure to avoid litigation or avoid regulations. That's the fear side."

—Bjørn Otto Sverdrup, the Norwegian chair of the Oil and Gas Climate Initiative, on the public and financial pressure on his members to address the environment, as reported by Fortune.

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