Wells Fargo is investing $54.2 billion into enhancing its operational efficiency and expanding its risk infrastructure in 2025.

The projected 2025 spend represents a 0.7% decrease from 2024, Mike Santomassimo, executive vice president and chief financial officer at $1.9 trillion Wells Fargo, said today during the company’s fourth-quarter 2024 earnings call.

The reduced spend is attributed to an estimated $100 million decline in operating losses from 2024 and a $500 million decline in severance expenses, according to the company’s supplemental earnings presentation. Wells in Q4 reported noninterest expenses of $13.9 billion, a 6.1% increase from Q3 but a 12% year-over-year decrease.

The bank’s projected expenses in 2025 include $900 million in incremental tech expenses, Santomassimo said during the call.

Building effective risk and control infrastructure is Wells’ top priority, Santomassimo said. The San Francisco-based bank plans to continue investing in technology initiatives and digital platforms to improve customer service, he said, including:

• Continuing the transition of Wells applications to the cloud;
• Migrating into new data centers; and
• Investing in data platforms.
• Wells also plans to enhance automated monitoring and response tools to address cyberthreats, the bank said in its earnings presentation.

BIGGER PICTURE: Wells’ technology initiatives expand into the following business lines:

• Consumer, small business banking: Investing in the Wells Fargo Mobile app, digital account opening and digital payment offerings.
• Consumer lending: Investing in core card capabilities, modernization of auto loan servicing systems, fraud prevention and enhanced digital capabilities to improve home lending sales.
• Commercial banking: Investing in modernization of lending systems and payment platforms.
• Corporate and investment banking: Investing in electronic trading, new product capabilities, risk management capabilities and talent acquisition for priority sectors.
• Wealth and investment management: Investing in its Advisor Gateway financial advising software, digital services for clients, broadening its unified account management platform for advisers and building out an independent channel platform with a suite of investment products and tools.

BY THE NUMBERS: Wells Fargo reported in Q4:

• Revenue of $20.4 billion, flat from Q3 and down 0.5% from Q4 2023;
• Active digital customers of 36 million, up 0.6% sequentially and up 3.4% YoY;
• Active mobile customers of 31.4 million, up 0.6% quarter over quarter and up 5% YoY;
• Headcount of 217, 502, down 1.2% QoQ and down 3.7% YoY; and
• Efficiency ratio of 68 compared with 64 in Q3 and 77 in Q4 2023.

NOTEWORTHY: Wells during Q4 added online payment solution Paze as an e-commerce checkout option, which can be activated through the Wells Fargo Mobile app, Wells announced on Oct. 29.

FUTURE LOOK: Wells sees 2025 as a year for significant opportunity to improve efficiency, Santomassimo said on the call.

“It’s just like peeling an onion. As you look at the next layer down, you find more efficiency, you bring better technology, you bring better automation,” he said, adding that efficiency initiatives reduce bank costs and improve client experience.

MARKET REACTION: Shares of Wells Fargo (NYSE: WFC) were up 6.9% from market open to $76.10 as of 2:45 p.m. ET today. Wells Fargo has a market capitalization of $253.4 billion.

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