CEOs of seven of the largest U.S. banks appeared before the House Financial Services Committee in April 2019. When the panel—all men, all white—were asked under oath if their successors were likely to be female or a person of color, no one raised his hand.
Without saying a word, the CEOs had put a fine point on a hard truth: Wall Street had never had a female CEO, nor was one likely in the near future.
The message they sent was antithetical to the mood of corporate America at the time. The #MeToo movement had prompted a harsh reexamination of office workplace dynamics; institutional investors were demanding that boards of directors add more women; and companies—banks included—were preaching the merits of diversity.
The moment left such a bleak impression that Fortune dedicated pages of its 2019 Most Powerful Women issue to asking three pressing questions: Why had bank CEO suites remained so impenetrable to women? Who might be the first to break through? And when?
We now have a definitive answer to those last two questions: Citigroup in mid-September announced that Jane Fraser would succeed Michael Corbat as chief executive in February. Barring something unforeseeable, Wall Street banks’ long-standing glass ceiling is history.
But Fraser’s appointment doesn’t eliminate the culture that had kept women out of the corner office for so long. In fact, it raises a new set of questions: Who is the woman who will be the first female CEO of a big Wall Street bank and how did she achieve what has, for so long, appeared unachievable?
On one hand, the most recent stage of Fraser’s career follows what Jane Stevenson, head of CEO succession at executive recruiter Korn Ferry, calls “the blueprint”: She worked her way through key business units at the bank and left each better than she found it. Yet at the same time, her refusal to sacrifice her personal life at the altar of her career flouts many of the old “rules” for getting to the top. That ability to find a middle way—to forge a new path through a very old maze—may indeed be an essential part of what makes her uniquely qualified for the job she’ll step into next year. And so, for that matter, is her willingness to talk candidly about navigating the labyrinth.
Fraser, 53, was born in St. Andrews, Scotland. (Yes, as a matter of birth she has an affinity for golf.) She moved to Australia for high school and with aspirations to be a doctor. But she soon learned she was bad at biology but fond of math and economics, which made banking a natural career fit.
From the University of Cambridge, she landed at Goldman Sachs in London at the tender age of 20. She would lament years later that she was “the boring British girl” in the office. “Everyone else was much more exotic, from all over Europe. They were a little bit older, they spoke multiple languages, and I just thought they were so much more interesting than I was,” she said in a 2016 address to the Americas Society and Council of the Americas. The feeling was motivation enough for her to leave London for Madrid, where she spent two years as an analyst at consultancy Asesores Bursátiles and worked on her Spanish—a skill that would prove especially useful years down the line.
After business school at Harvard in the early 1990s, her career diverged further from the typical banking trajectory. Rather than return to a place like Goldman, she opted to join consulting firm McKinsey for a reason she doesn’t sugarcoat: The women she saw in the banking industry at that time “were rather scary,” she said in the 2016 speech.
Those were the days of big shoulder pads and manly suits. The women and many of the men didn’t seem “that happy,” she recalled. “They were very successful. They were brilliant. But it was tough.”
In short: She wanted a life.
Working at McKinsey was still demanding, but it offered the same dynamic—being a trusted adviser to a client—with more predictability.
She got married two years later and got pregnant the same year she was up for partner. “I got quite a lot of advice, ‘Don’t get pregnant in your partnership year.’ And I just thought that was nonsense,” she told me at Fortune’s Most Powerful Women Summit in October. The firm informed her she’d made partner two weeks after she gave birth.
After that moment—having a baby, making partner—she did heed a different piece of advice: “I remember one of my mentors saying to me, ‘You’re going to have several careers in your life, and your careers are going to be measured in decades. So why this sense of rush and trying to have everything at the same time?’ ” It led her to make a decision that she says was critical: She chose to work the entirety of her five-year partnership—until she left McKinsey for Citi in 2004—part-time.
“It wasn’t easy—my own ego suffered a bit on that one, because you do see people who are more junior than you who are accelerating faster in their careers,” she said. “But that’s what enabled me to actually feel happy and have a balance in my professional life and personal life.”
That experience changed her perspective—and changed how she operated at the office.
“When I got back to working again and working full-time,” Fraser said, “my clients used to tell me, ‘You’re a much more empathetic person; you were just this machine before.’ ”
In 2004, Fraser joined Citi as head of client strategy in the bank’s investment and corporate banking division in London. This is the moment she returned to the traditional banking playbook and began tearing through it. Over the next 16 years, she took on a series of jobs at Citi that taught her about different parts of the business, gave her experience leading units that had their own profit and loss statements or P&L, and offered her opportunities to build relationships and a standout reputation within the firm. “Look at her background,” Stevenson says. Fraser’s rotation in and out of jobs was “an artful process that came together over a decade,” she says. “These kinds of roles lend credibility” when boards are weighing succession plans.
It helps, of course, if some of those roles require you to make tough choices or oversee troubled businesses—and if you prove you have what it takes to handle the demands.
After her run in investment and corporate banking, then-CFO Gary Crittenden offered Fraser the job of global head of strategy and M&A in September 2007 as the financial crisis was mounting. She took the job and relocated to New York to help then-CEO Vikram Pandit decide how to shrink the bank. She orchestrated the sale of Citi’s Japanese securities business to Sumitomo Mitsui Financial Group in a $8 billion deal that gave the bank a vital capital boost in 2009. She also laid the groundwork for Citi’s sale of its Smith Barney brokerage to Morgan Stanley. During her time in the role, she executed more than 25 deals in 18 months. The bank sold nearly a trillion dollars’ worth of assets and cut 100,000 jobs in the process.
Fraser recalls that work as one of her foundational experiences as a leader. “It does make you sit there and be more definitive and less wishy-washy,” she told me in October. “What does being client-driven really mean so it’s not just a plaque on the wall? What are some of the strategic choices you make? Do them early and do them well and stack them up to win…Nothing like a crisis to have your steepest learning curve.”
Valuable as the experience was, Fraser still wanted to run a business. Pandit gave her that chance in 2009, sending her back to London for four years to cater to Citi’s wealthiest clients as head of the private bank. It was a sexy job, especially compared with what came next: serving as CEO of CitiMortgage in St. Louis. She took that job in 2013, when the mortgage business was, as she admitted in the 2016 speech, “the scourge of the earth” following the subprime crisis. She oversaw the slow and painful process of righting the ship, as Citi paid hundreds of millions of dollars to settle claims that it had sold faulty mortgages to Fannie Mae and Freddie Mac years earlier.
Then, in 2015, Fraser got yet another turnaround job, when Corbat named her CEO of Citi’s Latin America business.
Latin America is the smallest of Citi’s regional divisions by net revenue but has the highest rate of return, making it something of a crown jewel. Its retail arm in Mexico, then known as Banco Nacional de México or Banamex, is one of Mexico’s biggest banks, and its 1,400 branches account for more than half of Citi’s physical locations globally.
When Fraser took over, the division was tarnished. In February 2014, Citi disclosed that oil services firm Oceanografía had allegedly defrauded Banamex out of $400 million. Months later, Banamex disbanded a unit of the bank that provided security to executives after discovering that employees had engaged in illegal activity by offering unauthorized services to outside parties.
In a 2017 interview with American Banker, Fraser talked about trying to change the bank’s culture in Latin America so employees would be “more comfortable escalating issues, or saying, ‘I’m not comfortable with what my boss [has] done.’ ” A big part of that effort was convincing employees that the bank would act on allegations of wrongdoing. “A lot of this comes down to trust,” she said. People must believe that “if they raise an issue they’re going to be okay, and you will do something about it.”
With Fraser as CEO, the Latin American division also sold off consumer banking and credit card operations in countries like Brazil, Argentina, and Colombia to more narrowly focus on its institutional business in the region.
At the same time, Citi poured $1 billion into Mexico, the only Latin American country where it still has retail operations. The four-year investment, announced in 2016, was intended to upgrade the customer experience with new ATMs, new digital tools, and branch makeovers.
During Fraser’s tenure, net revenue and net profit for the Latin America division grew 8% and 38%, respectively.
Fraser’s next promotion, in October 2019, to president and CEO of global consumer banking, was an indication that the work she’d done in Latin America had pushed her to the next level. It was confirmation of what colleagues say was already obvious: that Fraser was Corbat’s heir apparent. “Giving her the consumer business, which is half of our revenues and a line operating business, and making her president was … to tee her up to get ready to be CEO,” Citi chair John Dugan says.
But Citi officially launched Fraser into the top job sooner than expected. When Fraser was named president, Corbat indicated he had “years” left at Citi, but his No. 2 got the nod 11 months later.
Corbat called himself “a steadfast believer in term limits” in explaining the timing in a LinkedIn post. Dugan says Corbat had always planned to leave in 2021 but decided to depart on the early side so Fraser could “own” the bank’s efforts to improve controls and risk processes.
The accelerated timeline also gave Citi an advantage that wasn’t lost on the board—it got to be first to name a female CEO. “We were delighted to beat everyone to the punch. It was going to happen, and we were delighted to have a candidate who was so eminently qualified for the job,” Dugan says.
While Fraser’s ironclad résumé looks, in many ways, like that of the big bank CEOs who’ve come before her, her personal approach to her work doesn’t always conform to the corner office mold.
She’s appeared unafraid of sharing the moments of self-doubt that so many CEOs seem to hide away in the backs of their custom closets. She says her initial response to being offered the global head of strategy and M&A was that she wasn’t good enough for the role. She recalls a friend convinced her, saying, “Why are you worried about failing? Go for it. What does it matter if that’s the case?”
Fraser’s willingness to talk about the human side of the job—whether lapses in self-assuredness, the demands of parenthood, the past failings of bank culture—sets her apart not just from her Wall Street peers, but from other women who have achieved “firsts” in their industries, some of whom fear that by being open about such things they’ll be pigeonholed by the label, female CEO. Fraser sees it as an advantage: “I can be more vulnerable in certain areas; talking more about the human dimensions of this than some of my male colleagues are comfortable [with],” she told me in May. “I don’t feel that’s in any way soft or weaker; I actually think it’s much more powerful.”
Before her posting to Latin America, Fraser succeeded Cecilia Stewart, now retired, for a stint as CEO of Citi’s U.S. consumer and commercial bank. As part of the leadership transition, the pair met with bankers across the country. Stewart recalls Fraser could “just naturally sit down and talk with someone and connect with them, whether it was work-related or life-related.”
“For a person—male or female—to have that level of compassion in their leadership style and that openness and willingness to discuss all different types of situations is critically important,” Stewart says. The approach is especially well suited for the pandemic. “2021 and 2022 for corporate America may look really different,” Stewart says, “so having a leader like Jane who is flexible, who is willing and open to lead through that kind of change, whatever that turns out to be, is terrific and a positive for Citi.”
Breaking the glass ceiling, of course, was just the beginning. Big banking’s first female CEO is not inheriting a well-oiled machine.
Less than a month after Citi named Fraser its next CEO, Citi agreed to pay $400 million after the Federal Reserve and Office of the Comptroller of the Currency reprimanded the bank for long-standing deficiencies related to its risk controls. The action followed an embarrassing episode in August in which Citi erroneously sent $900 million to Revlon lenders, roughly 100 times as much as they were supposed to receive. The OCC order gives the regulator veto power over any major Citi acquisition and, if necessary, the right to mandate changes to the bank’s senior management team or board.
It is “not typical” for the regulators to “come down so hard unless they’re really not happy,” says Arthur Wilmarth, a George Washington University law professor who has studied bank regulation. In a statement, Citi said it was disappointed to have fallen short of the regulators’ expectations and has “significant remediation projects underway.”
Investors are also eager for Fraser to address Citi’s profitability, which has long trailed that of its Wall Street rivals.
Another challenge is more out of Citi’s control. “We’re in the middle of a pandemic and recession. Loan losses are going to go up, and interest rates are at historic lows,” says Barclays analyst Jason Goldberg. Fundamentally, it’s a hard time to be a banker.
The regulatory action was a sucker punch to Citi, but Wilmarth argues that, in a way, it actually bolsters Fraser’s position. Under the circumstances, “I doubt that she would’ve gotten the job without the implicit blessing of the regulators,” Wilmarth says. (Citi declined to comment.)
Goldberg says Fraser’s track record means she’s well suited to meet the moment. Citi “is in need of some retooling,” he notes. “She has a lot of experience cleaning things up and turning things around.”
Fraser echoes that point in conversation in October. In the face of any crisis, “I think it’s going back and saying, ‘What are some of the root causes and then how do you turn that into an opportunity to really leapfrog and take the bank to a different level?’ ” Fraser says. “And then how do you galvanize the organization to work toward that? I did that with the private bank, did that with mortgages, did that in Mexico. And I’m excited to do it here too.”
In September, Fraser was the first woman to get a Wall Street CEO job. Come February, she’ll be the first one to do the work.
A version of this article appears in the November 2020 issue of Fortune with the headline, “The first lady of Wall Street.”