Technology spend at banks varied during the fourth quarter of 2022 amid talk of a recession. 

The $3 trillion Bank of America saw 8% growth in non-interest expenses in Q4 to $5.1 billion and $1.8 trillion Wells Fargo saw a 5% year-over-year increase in tech spend to $902 million contributing to the bank’s 23% increase in non-interest expenses which reached $16.2 billion.

“We still have clear opportunities to improve our performance as we make progress on our efficiency initiatives and continue to make the investments necessary to grow the business through technology and product enhancements,” Wells Fargo Chief Executive Charles W. Scharf said during the Q4 earnings call.

While most banks saw their tech spending rise, some financial institutions pulled back spending due to rougher economic times ahead. For example, $3.3 trillion JPMorgan Chase reduced its tech spend 4% YoY to $9.9 billion. However, the bank’s non-interest expenses grew 7% YoY to $19 billion.

Q4 non-interest expenses: 

Layoffs hit banking industry

The turbulent economy also resulted in layoffs for several institutions. The $455 billion Capital One, for example, laid off 1,100 tech workers in January due to a “modestly worse economic outlook,” Capital One Chief Financial Officer Andrew Young said during the bank’s Q4 earnings call in January. 

Goldman Sachs decreased its headcount by 6% in the quarter, as Chief Executive David Solomon cited a “disappointing” and “challenging” period for the $1 trillion bank during its Q4 earnings call. 

However, one bank is looking to the layoff pool for talent opportunities — $191 billion Ally Financial is surveying recently unemployed tech talent as potential hires, Chief Executive Jeffrey Brown said during the company’s Q4 earnings call in January.  

“We think it’s kind of interesting what’s going on in the world of technology, [with] more layoff announcements throughout this week or this morning. And that may provide us an opportunity to bring in incremental talent,” Brown said.  

Digital usership on upward trajectory

Digital usership in Q4 continued to rise at several financial institutions. At $548 billion Truist Financial, digital usership increased 3% YoY to 4.38 million users, according to the bank’s earnings presentation. 

“We introduced many new digital capabilities and solutions to clients in 2022 from Truist One Banking, Truist Assist and expanded digital investment capabilities,” Truist Chief Executive Bill Rogers said during the Q4 earnings call. “In 2023, our goal is to more fully activate those capabilities with our clients to improve acquisition, retention and reduce cost.” 

JPMorgan Chase also posted growth within its digital platforms with a 9% YoY jump in mobile usership to 49.7 million users through the acquisition of fintechs such as cloud-based plan management software Global Shares, cloud native payments technology company Renovite Technologies and cloud-based payments fintech Viva Wallet. 

Wells Fargo’s digital usership increased 1% YoY to 33.5 million users while its mobile active customers rose 3% YoY to 28.3 million users following enhancements to the bank’s mobile app, upgrades to its digital banking platform, Vantage, and the launch of its digital assistant, Fargo. 

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