Citizens Bank is looking to build on the momentum of its tech investments with new AI applications among the bank’s 2025 goals.
THE BIG PICTURE: Citizens is investing in enhanced data analytics and exploring AI uses to help run the bank more efficiently and better serve consumers, Chairman and Chief Executive Bruce Van Saun said today during the $217.2 billion bank’s first-quarter earnings call.
“We’re constantly working on ways to streamline our business,” he added, noting that Citizens is “not content” with its AI initiatives as opportunities continue to emerge.
Citizens in Q1 reported $1.3 billion in noninterest expense, down 2% from Q4 2024 and down 3% from Q1 2024. Despite the overall reduction, the bank spent $194 million on equipment and software, up 1% both sequentially and annually.
The bank in its earnings presentation attributed that slight increase to rising platform costs and continued tech investment.
BY THE NUMBERS: In Q1, Citizens reported:
- $1.9 billion in revenue, down 3% quarter over quarter and down 1% year over year;
- $373 million in net income, down 7% QoQ and up 12% YoY; and
- An efficiency ratio of 67.9 compared with 66.3 in Q4 2024 and 69.3 in Q1 2024.
OF NOTE: Citizens this month launched Citizens Payee Select, a digital platform for businesses to accept payments.
The platform, developed in collaboration with cloud-based payment solutions platform Verituity, allows real-time payments, ACH payments and checks, with additional payment methods under development, according to an April 8 announcement from the bank.
While the federal government is ending the use of paper checks on Sept. 30, the financial services industry has been moving to digital payments for quite some time, Taira Hall, head of enterprise payments at Citizens, said in a statement to Bank Automation News.
“Digital payments adoption and usage is rapidly evolving. However, safety and security of payments remains a critical focus,” Hall said. Digital payments can reduce the risk of payments fraud, which has notoriously plagued check payments, she added.
“This shift could create positive momentum for the adoption of new real-time payment methods,” she said. “Banks are positioned to support and educate all clients on the options available to them as they contemplate making changes in their financial operations.”
MARKET REACTION: Shares of Citizens (NYSE: CFG) were down 3.1% from market open to $35.01 as of market close today. Citizens has a market capitalization of $15.3 billion.
