Citigroup (C.US) places one of its least attention-grabbing business in the center of its business upgrade to showcase how a massive global fund transfer system can improve profitability.

Citigroup CEO Jane Fraser and CFO Mark Mason will reportedly introduce their service department to investors on Tuesday, one of five newly established departments after the bank's restructuring. The service department's share of Citigroup's total profit is becoming larger and larger, contributing to almost half of the bank's total profit last quarter. Wells Fargo & Co analyst Mike Mayo said, "This business is a 'raw diamond.' It's the best business of a company that's at its worst but improving."

The core of Citigroup's service department is managing many channels that run through the financial system. This business helps large international clients manage and transfer cash globally - processing payments for goods, services, and wages, handling capital flows and fund investments, and providing cash at critical junctures in the supply chain. Amazon and Uber Technologies are among the department's largest corporate clients. The U.S. government also uses the bank to distribute salary domestically and abroad. Shahmir Khaliq, head of Citigroup's service department, said the department handles nearly $5 trillion a day.

While Citigroup's trading and large credit card business usually attract attention at earnings conference calls, its service business has become the backbone of Citigroup's stable profits. For Citigroup, which is under pressure to invest money in systems reform to catch up with its competitors and face regulatory demands, this is undoubtedly a highlight. The rise in interest rates boosted the amount of funds in the service unit and pushed Citigroup's stock price up about 17% this year.

Citigroup's network is closely connected to its leading foreign exchange team, a result of decades of effort to integrate global banking operations. Okan Pekin, head of the bank's securities service, said, "You can't go out and build this network today - it's too complex." "The network itself doesn't give you sustainability and competitive advantage. You need technology, talent, and relationships."

At the same time, Shahmir Khaliq said Citigroup's service department has been committed to responsible use of artificial intelligence and has clear guardrails. He added that the first batch of use cases is expected to go live in the third and fourth quarters.

It is worth noting that Citigroup's global performance in overall business may decline. In January, the bank added $1.3 billion in reserves to address cross-border and cross-currency exposures in Argentina and risks associated with Russia. The bank's retail banking business in 14 countries is also in the later stages of contraction.

Since Jane Fraser took over Citigroup in March 2021 and was tasked with overhauling the bank's internal systems, its stock initially underperformed the KBW Nasdaq Bank Index covering major U.S. banks. However, since Jane Fraser announced more aggressive measures to boost returns last year, the bank's stock performance has improved. This week's promotion aims to continue the momentum by showing investors that there is still more room to rise for the stock.