Citizens Bank reiterated its commitment to migrating all operations to the cloud by 2025 to create a modern banking platform during today’s third-quarter earnings presentation.  

“On the technology front, we have a very extensive agenda with a multi-year next-gen tech cloud migration targeting the exit of all of our data centers by 2025,” Chief Financial Officer John Woods, said during the call. 

The $222 billion bank is also increasing its investment in automation and AI to drive operational efficiency, simplify processes, and save on costs and third-party spend, Woods said. 

The company’s investment in technology has helped by “improving our returns over the medium term,” Woods said, adding that he expects more cost savings in the coming quarters. 

THE BIG PICTURE: Citizens Bank’s industry peers, including Citibank, BNY Mellon, and Wells Fargo, are increasing their investments in automation and AI to drive efficiency. Citibank, for example, added 6,000 employees to its tech department in Q3 to modernize its security infrastructure, enhance client experience and improve its data structuring.   

Meanwhile, the Providence, RI-based Citizens is using generative AI to help its customer representatives record and summarize calls so that they can focus more on what consumers want, Jo Wyper, head of commercial banking digital and operations at Citizens Bank, told Bank Automation News this month. 

BY THE NUMBERS: In Q3, Citizens reported; 

• Net interest income of $1.5 billion, down by 9% year over year; 
• Total revenue of $2 billion, down by 7% YoY;  
• Salaries and employee benefits of $654 million, up by 3% YoY; and 
• An efficiency ratio of 64.2% in Q3 2023 compared to 57% in Q3 2022. 

NOTABLY:  

• Citizens Bank aims to launch its generative AI-driven chatbot for its commercial clients this quarter, Wyper said. In addition, it plans to roll out more than 100 digital features like digital onboarding and know your customer, in the coming year. 
• The bank is retraining its workforce as it explores use cases of generative AI within contact center systems, advising and coding. 
• Citizens is planning to join Versana, a syndicated loan facilitating consortium owned by Citibank, JPMorgan and Bank of America. 

FLASHBACK: In Q2, the bank selected embedded pay-over-time provider Wisetack for its new consumer financing platform, Citizens Pay.

And Citizens last year redesigned its mobile banking app with self-service features in an effort to reduce call center volumes. 

FUTURE LOOK: Citizens Bank is well positioned to capitalize in a “higher for longer” rate environment and can also capitalize on a rate cut by the Fed in the future, Woods said. 

In a high-rate environment, the banks can see their net interest income rise, and when rates start coming down, it might see more loan originations, which will be beneficial to business, Woods added. 

MARKET REACTION: Shares of Citizens Bank [NYSE: CFG] were down by 5.57% from market open to $25.59 as of market close today. Citizens has a market capitalization of $12.12 billion. 

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