According to the Wall Street Journal, the app saved customer information in a hidden file on the handset.
The data is thought to include details surrounding security access codes, bill payments and account information and could have also been stored on a computer if synched with an iPhone.
In a statement issued by Citigroup, users were urged to download the latest version of the banking technology, which updates the app and removes any saved confidential data.
âDuring a recent review, we discovered that our US Citi Mobile iPhone banking app was accidentally saving information related to customer accounts in a hidden file on their iPhones,â the financial institution explained.
Citigroup added that updating the application should prevent from the technological error from occurring again.
No personal data belonging to its customer base is believed to have been accessed inappropriately as a result of the glitch.
Citigroup recently reported a net income for the second quarter of 2010 of $2.7 billion and was a second consecutively profitable three-month period for the bank.
By Jim Ottewill