Fifth Third Bank saw higher technology-related expenses during the fourth quarter as it continued to invest in “platform modernization,” including the launch of its new cloud-based mobile app, Chief Financial Officer Jamie Leonard said during today’s earnings call. 

WHY IT MATTERS: Fifth Third increased technology and communications spend 8% year over year to $111 million during Q4, according to its earnings presentation. The $207 billion bank did not break out the specific areas of technology investment during the presentation. 

THE BIG PICTURE: The bank prioritized the digitization of its manual processes throughout 2022 and expects to maintain its full-scale digital transformation efforts, Leonard said during the call.

“Expense growth was driven by our acquisition of Dividend Finance during the year, combined with continued investments in Provide, compensation associated with our minimum wage hike, as well as higher technology and communications expense, reflecting our focus on platform modernization initiatives,” he said. 

BY THE NUMBERS: Fifth Third reported for Q4: 

• Noninterest expenses rose 2% YoY to $1.2 billion; 
• Noninterest income fell 6% YoY to $735 million; and 
• Equipment expenses climbed 3% YoY to $37 million. 

NOTEWORTHY: In 2022, the bank relaunched and migrated its mobile app to the cloud to provide better customer experiences and more streamlined customer connections. 

“During the year we also made meaningful progress on our technology modernization initiatives and enhanced our peer-leading, digitally enabled treasury management, managed services, and our momentum banking product offerings,” Fifth Third Chief Executive Tim Spence said during the call. 

FUTURE LOOK: The Cincinnati-based bank expects more investment in technology moving forward, as it aims to reach a 10% growth in its technology expenses heading into 2023, Spence said during the earnings call. 

“We’ll make significant progress on our tech modernization journey and begin to realize savings and improve the client experience by leveraging these investments to drive automation into our most labor-intensive processes,” he added.  

Fifth Third Chief Information Officer Jude Schramm will join the panel discussion on “Solving data expandability issues through cloud” at the Bank Automation Summit U.S. 2023 in Charlotte, N.C., on Thursday, March 2, at 9:15 a.m. EST. 

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Bank Automation Summit US 2023, taking place March 2-3 in Charlotte, is a crucial event on automation and automation technology in banking. Learn more and register for Bank Automation Summit US 2023.