Loraine Lawson
Hi, everyone, I’m Deputy Editor Loraine Lawson, and welcome to The Buzz from Bank Automation News, where we explore how automation and emerging technology is transforming the banking industry. This is our Weekly Wrap for what’s happening in the industry. This week, I’d like to give a big thank you to our sponsor Glia. I’m also pleased to be joined by Associate Editors Aaron Marsh and Alijah Poindexter. It is January 21, 2022. And last Friday lunched a week of earnings reports for the big banks, starting with JP Morgan’s report, when they revealed the bank would increase their technology spend by $2.4 billion, or 20%. In a year, normally, the bank spends about $12 billion on technology. So that would increase their spend to $14.4 billion. For some comparison, the bank reported revenue of $29.3 billion for the last quarter of 2021. So not quite a quarter to make the amount they’re spending on technology. Where’s that money going? Well, the additional spend will go into cloud capabilities, data centers, data and analytics, and digital customer experience in part. Alijah, you reported on Wells Fargo, what tech learnings do we glean from their earnings report?Alijah Poindexter
Yeah, so Wells Fargo had a pretty strong tech portion of their Q4 earnings report for 2021. Their tech spend was $827 million. So that’s 12% over the previous quarter, but a 1% year over year decline. And you know, the main tech offering that they spoke about in this particular earnings call was their revamped mobile experience. They said it has a new look, a new feel. And then they also have, Fargo has their new virtual assistant. It leverages machine learning to do rudimentary tasks, answer questions for the user, all that good stuff. And then on top of that, they also talked about Zelle which obviously, you know, Wells Fargo was one of the big banking backers, and it has some other backers of Zelle include, I think Capital One and truist. But they talked about Zelle too, and Zelle transactions year over year have increased 46%. So again, Wells Fargo really tapping into the sort of mobile banking and real time payments side of their tech business.Loraine Lawson
And Aaron, you covered Bank of America, what did you learn?Aaron Marsh
Bank of America had a really strong quarter. And what stood out to me is that is in 2020, we were sort of like buried in pandemic effects. In 2021, Bank of America saw almost an 80% growth in net income. And when they, you know, when it came down to explaining how this how this came about, CEO Brian Moynihan just basically said digital, digital digital, they cited their digital products, their digital platform, and digital growth, and also specifically said that laying that foundation was going to build out more profitable growth going forward, as in it costs less, to have that have that growth in digital and to give you sort of a sense of that. Their virtual assistant and financial advisor tool, Erica, has seen like a 43% increase in users. But not just the users, but the amount that they’re using Erica, so you had in this most recent quarter, you had almost 25 million users up from 17, just over 17 million at the same time in 2020. But there was like a almost 250% leap in the number of interactions that they had with Erica, so the users went up like 43%, but then those users are just having many more interactions and getting a lot more done with Erica. And then and then just as, as Alijah had mentioned, to Bank of America also saw some pretty notable increases in Zelle person to person digital payments. I think they just reported in this, this most recent quarter, they had 15.8 million users and 218 million Zelle transactions totaling some $65 billion and Moynihan set and this is I think, kind of this this lays this out very, very bluntly for you. So “the number of Zelle transactions now surpasses the checks written by our customers.” So there’s you’re actually getting a bigger total now through digital person to person payments through Zelle than the than the total grand total of all those checks written by customer by consumer so so It’s telling you certainly it looks like that digital strategy is very central to Bank of America going forward.

Loraine Lawson
You know, Erica, of course, is sort of the top of the pack when it comes to chatbots. If you could even call her chat bot, she’s almost transcended that. They were improvements are every year. But you know, one of the things that strikes me about all this, with the Zelle numbers being so high, and the digital spending, and transactions being so high is that this is the legacy in financial services of COVID. We’ve seen a shift, banks have seen a shift since COVID, in more digital engagement. And that makes sense. You know, people don’t want to be, they’re not meeting in groups to where they could trade money or checks. So they’re doing the pay to pay with Bill. And they’re not going into their local branch like they used to. So it’s an interesting legacy. I will say, we also reported on Truist, which highlighted its recently launched ecosystem and technology automation advanced since hearing it certain earnings call. And among the capabilities that it will introduce this year, it said our new artificial intelligence driven insight tools, a new digital assistant, and a developer center, this is kind of interesting, that will allow the mate to collaborate more with the developer community. So a lot of this push digital, you’re seeing your reach out to the technology community to try and get that talent, they need to support this. Anymore lessons learned.

Aaron Marsh
Yeah, just reinforcing the digital, you know, I’ll throw in there, we just covered Citizens as well. And you kind of heard some of the same refrain coming from citizens, you know, Citizens talked about sort of their regional presence, and they want to move toward, you know, more of a national presence. And the way that they want to do that they talked about these siloed, prod products that they’ve had silos ation in their products. So what they’ve done is they’re really focusing on their cloud based platform offerings, they’re, they’re transitioning all of that to a single digital platform. And they just say it’s much, much faster rollout. They also cited, they’re kind of more nimble, or, you know, mid-size, bank size to be able to sort of compete and bring products to market very quickly, like competing with fintechs. And they said that’s going to help them going forward and also targeting regions, really the New York metro region, Washington, DC, they mentioned South Florida, and they want to transition kind of from that regional, you know, presence or various regional presence is to a more national unified umbrella presence under the citizens banner, and the way that they’re looking to do that is through the digital portfolio.

Loraine Lawson
It’ll be interesting to see if banks increase their tech spending in the coming year to sort of keep up with the JP Morgan’s of the world that are spending, you know, 20%, more, almost $15 billion on technology. Thank you so much for joining us for the Weekly Wrap on the Buzz. Next week. We’ll be reporting on what guys wouldn’t be reporting on. I know there’s some podcasts coming up.

Aaron Marsh
Sorry. My microphone is off for a second. Oh, I guess I’ve got a little discussion on nCino coming forward. Coming up next week, I’m really kind of excited about get a little bit of nCino’s digital banking platform strategy, how they want to build that out some specific markets. They’re targeting. And spoiler alert, I always say this, but it’s Canada. They’ve got a big plan for Canada. And they are they’re seeing some pretty notable gains there. So we’re seeing some pretty exciting partnerships with Encino. And hopefully, you enjoy the what we heard from them. So that’s something we’re excited to share.

Loraine Lawson
A little bit more on how to secure RPA. Bots. Spoke with a Gartner analyst last week. So we’ll be reporting on that. And Aaron, what are you going to be? I mean, Alijah, I’m sorry, what are you going to be reporting?

Alijah Poindexter
On Monday, I have a story coming out. I spoke to the CTO of excuse me locality bank, they are a new digital neobank that launched in Florida. Last week, they had a heck of a launch, I gotta say, it spoke to their CTO, Corey Leblanc. And it was super engaging. He’s super into the open banking side of things and any, you know, he sees banking becoming a in America, eventually matching what it looks like in Europe in terms of open banking, embedded finance, data, sharing that kind of stuff. And so it was great to pick his brain and see what it’s like, you know, opening up a truly digital challenger bank in the new year, so I look forward to that as well.

Loraine Lawson
Okay, thank you again for joining us. Don’t forget to attend our bank automation Summit, which is March 1 through second in Charlotte, North Carolina. You can learn more about the bank automation summit at Bank automation summit.com For more podcast content check out big automation news.com and search the buzz from bank automation news on iTunes and Spotify.