Welcome to Future of Finance, where Fortune asks prominent people at major companies about their roles in this vast, ever-changing ecosystem—and what it all means for how we use money.
Citizens Financial Group, Inc., headquartered in Providence, R.I., had $222 billion in assets as of Dec. 31 as the 14th-largest bank in the U.S. John F. Woods joined the firm in 2017 as the EVP and chief financial officer, and was named a vice chair of the bank in February 2019.
In a recent conversation with Fortune, Woods, who’s also held CFO roles at MUFG Americas Holdings Corp. and JPMorgan Chase, discussed his experiences in reallocating capital and liquidity to support investment, the changing roles of CFOs, and embracing the latest in technology to, among other things, meet evolving customer expectations.
(This interview has been edited for length and clarity.)
How would you describe your role at Citizens?
My responsibility is really to allocate resources. We have four big pools that we use to conduct business—capital, liquidity, technology investments, and operating expenses—across the entire platform. What I basically do is orchestrate the highest and best use of all of those resources by partnering with business leaders. For example, if business leaders would like to hire a lot of people, that’s operating expenses, or if business leaders would like to grow their business by making more loans, I have to allocate capital and liquidity to support that loan. But if there are more requests for capital and liquidity than we have available, then my job is to rank those opportunities and make a decision about which ones get green-lighted.
There is an unlimited interest in building technological capabilities as well. It could be across the board, in terms of building new systems, new interfaces with our customers, more investments in our mobile app, the website, or even generative AI. And the question is: What is the portfolio of technology investments which will connect with our strategic vision? There are more requests for technology capital than we have available, so it’s my job to rank those.
It sounds like you work collaboratively across all departments. Does that also make you a steward of the company’s strategy as well?
The evolution of the CFO role over the past decade or more involves an intensifying expectation that the CFO is a partner to the CEO—and to the business unit leaders on deriving strategy.
The expectation that a CFO has orchestrated an environment whereby our financial statements are complete and accurate, generated on time, and all our regulatory materials are submitted with a high degree of accuracy—all of the pipes and plumbing of financial information operating—is now table stakes. It’s just expected that happens. The value that a CFO is really adding is artfully allocating scarce resources to achieve strategic objectives, and to advance initiatives that would have the best return for investors and shareholders.
Another part of my role is that of an external spokesman, with respect to the direction of the company. The CEO is the primary driver of managing the external message, but I’m a fast follower with respect to how I interact with the equity investor community and in articulating the direction of the company.
How was your experience starting out at Citizens?
I joined a year or two after the IPO, so I can’t say that I was actually in on the ground floor, but I was pretty close. So it was a year or two after the IPO, and Bruce’s vision was to take this underperforming subsidiary of a foreign bank and transform it into a top-performing bank in the United States. And, really, the vision was compelling. I decided to join, was inspired by the ability to roll your sleeves up and be part of a growth story.
What we had then was a very limited product set across commercial—primarily with a lower-quality deposit profile of consumers. And what we’ve done since then is build a highly competitive platform to serve all of our customer segments—an excellent deposit platform, a fantastic product set across retail, business banking, private banking, and middle-margin commercial. It’s been an incredible story.
Can we talk about how Citizens surprised industry watchers in 2023 by launching a private bank with the acquisition of arguably First Republic’s strongest assets—its private bankers?
For a number of years, one of our strategic objectives has been to be able to serve high-net-worth individuals. We did that a while back when we acquired a company called Clarfeld. That created capabilities to provide advice to the high-net-worth customer segments. But we had been unable to scale that platform because of the need to have enough bankers to interact with this customer segment. But the opportunity arose when First Republic started to get into trouble last spring.
We had an opportunity to bid on acquiring First Republic as a company. We didn’t win that bid—JPMorgan did. However, as part of that process, we became very attracted to the business model at First Republic. And a lot of the private bankers who worked at First Republic didn’t want to work at a very large bank—that’s the reason they worked at that bank in the first place.
We were contacted by a number of private bankers that used to work at First Republic, and they said, “Listen, we would love to be able to maintain our approach to serving high-net-worth individuals, but we would like to do it outside of the very largest banks, and we think Citizens would be an interesting opportunity.” It went very quickly from a conversation with a handful of people to, all of a sudden, 150 people who decided that they wanted to join the Citizens platform.
We had a whirlwind several weeks of negotiations and were able to hire people in California, Boston, New York, and Florida. We’re going to be setting up shop and opening up branches in all of those geographies. We expect that the private bank is going to generate significant returns. We just launched formally in the fourth quarter of 2023, and we have over a billion dollars of deposits already.
What does the future of finance, especially in banking, look like to you?
We have to think of ourselves as much as a technology company as we are a banking organization. We have many more engineers and data scientists on staff than we would have had in the past. Our interactions with customers stretch well beyond our branch footprint—a customer may decide to walk into a branch one day, and leaving the branch expect to be able to interact with us on their mobile device, and then may call our call center and expect the call center to know what just happened at the branch.
Like using the Uber app, for example, they expect the same level of effectiveness on a banking app. I think banks have evolved to understand the need to be incredibly agile and highly innovative.
The other part I would add is that banks will have to address what’s going on in the regulatory environment. Customers will want to interact with fewer banks today than they used to in the past. So being able to have your transactions processed quickly and reliably—all of that is table stakes.
Banking products themselves are beginning to be embedded within other technologies—we call that embedded finance. So if you are engaging, not with your bank directly, but you want to facilitate payments, but you’re not on a bank app, that’s basically being powered by banks behind the scenes. Something that we’re keeping a close eye on is how to remain relevant in a world where banking products are now being embedded outside of banking applications.
