Fifth Third will continue to modernize its platform through technology as long as the return on investment remains prominent.

In the first quarter of 2023, the bank’s tech and communications spend increased 17% year over year to $118 million related to the cost of modernization investments, according to the bank’s earnings release.

“We do not intend to pause the strategic investments we are making,” Chief Executive Tim Spence said during the Fifth Third Q1 2023 earnings call today, noting, “Those are going to be too valuable for the franchise in the long term.”

In fact, technology costs will continue to increase as enhancements stay on track for the rest of the year, Chief Financial Officer Jamie Leonard said during the call. For example, a new ledger will launch in Q3, followed by a certificate of deposit platform and the continued rollout of the nCino platform across the commercial business.

BY THE NUMBERS: Fifth Third reported for Q1:

• Noninterest expenses increased 8% YoY to $1.3 billion;
• Noninterest income grew 2% YoY to $723 million; and
• Equipment expenses bumped up 3% YoY to $37 million.

NOTEWORTHY: In March, Fifth Third acquired Big Data Healthcare, a technology solutions provider in the healthcare payments space, according to the bank’s earnings release.

The acquisition presents further peer-to-peer digital payment offerings to the bank, according to the release. Terms of the deal were not disclosed.

FLASHBACK: In January, the bank added Early Pay for federal tax refunds through the Fifth Third Momentum Checking digital banking platform.

Since the launch, $27 billion has been deposited up to two days early, according to the bank’s Q1 2023 earnings presentation.

FORWARD LOOK: In June, the bank will enhance its language model to ingest more than 2 million data elements, Jude Schramm, chief information officer at Fifth Third, said in March at Bank Automation Summit U.S. 2023 in Charlotte, N.C.

The updates are part of the bank’s AI strategy, which allows Fifth Third to ingest more data, building improved conditionals and further improving the bank’s mobile application and messaging platform communication.

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