Big banks and regional financial institutions released their first-quarter earnings this month, showing sizable increases in tech spend and significant returns on investment.

Tech spend trends upward

Tech spending was up across the board for most of the nation’s big banks.

The $3.24 trillion Bank of America’s tech spend grew to $1.54 billion in Q1, an 8% year-over-year increase, with the bank reporting that its full-year tech initiatives budget would increase to $3.6 billion. The $2.3 trillion Citi announced that its 2022 tech spend will reach $11 billion, an 11% YoY increase, while Q1 spending grew 9% YoY to $2 billion. Tech spend at $1.94 trillion Wells Fargo rose 4% YoY to $876 million.

Return on tech investments was also strong. Bank of America’s digital CashPro platform underpinned $454 billion in payment approvals, a massive 118% YoY increase, while sign-ins skyrocketed 51% YoY to 1.7 million. Meanwhile, Wells Fargo added 500,000 new customers to its mobile banking business in Q1 alone, which Chief Executive Charles Scharf credited to a focus on digital adoption.

“Digital adoption, which is critical, is about delivering seamless digital experiences that our customers expect,” Scharf said during the bank’s earnings call earlier this month.

An outlier from the big banks was $3.95 trillion JPMorgan Chase, which saw its $2.36 billion Q1 tech spend inch down 4% from the previous quarter and 6% YoY. However, the bank previously announced that its annual tech spend would grow by 20% in 2022, and Chief Executive Jamie Dimon highlighted the importance of tech investment in his 2021 annual letter.

“Technology always drives change, but now the waves of technological innovation come in faster and faster,” Dimon said in the report. “The science behind them is also increasingly complex as technology (including AI) is ‘embedded’ in more products. In today’s world, I cannot overemphasize the importance of implementing new technology.”

Q1 tech spend at other large banks:

Tech spend at $544 billion Truist was broken into three potential categories: $232 million in software expense, up 11% YoY, $118 million in equipment expense, up 4.4% YoY, and $363 million in professional fees and outside processing, up 3.7% YoY.

Regional banks double down on technology

The $187 billion San Francisco-based First Republic Bank spent $107 million on technology in Q1, a 27% YoY increase, and touted a core conversion which the bank called the largest in its history. The conversion will allow the bank to increase security and regulatory measures as it scales digital operations.

Tech spend at $122 billion New York-based Signature Bank reached $14.5 million, also a 27% YoY increase, and bank executives identified automated FedNow and blockchain transactions and the bank’s digital asset deposits as specific technology wins for the quarter. The $95 billion Stamford, Conn.-based Synchrony Financial, which operates the digital Synchrony Bank, increased its tech spend by $145 million, a 10% YoY increase.

Virtual assistants reap positive dividends

Erica virtual assistant metrics proved positive at Bank of America, with total users reaching 26 million in Q1, and interactions growing to 124 million, a 17% YoY increase. Chief Executive Brian Moynihan said during last week’s earnings call that total Erica volumes were up four times from pre-pandemic levels.

Truist announced plans to release Truist Assistant, a cloud-based financial virtual assistant, later in Q2. Chief Executive Bill Rogers said during last week’s earnings call that Truist Assistant understands customer questions, gives intelligent responses, and performs client tasks.

“Truist Assist will help clients execute basic tasks, schedule appointments, and provide insights and recommendations so they can have more control and confidence in their financial well-being,” Rogers said.

Up-to-date stock information for each bank can be found in the linked stories above.

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