Fifth Third Bancorp FITB intends to further expand its digital capabilities. Per a Bizjournal report, the bank has already hired nearly 50 employees for its digital and IT teams since the beginning of the year, and plans to add roughly 200 more over the next few months.
The company’s chief digital officer Melissa Stevens stated that teams that are focused on digital are expected to triple in size in the near future. At present, Fifth Third employs more than 1,000 workers on its digital and IT teams.
It will be hiring cloud engineers, digital product owners, user experience designers and agilists, with majority based in Greater Cincinnati.These employees will be expanding the company’s tech foundation, enterprise wide services and customer-facing technology, including improvements in mobile apps. These are expected to further enable customers to complete transactions themselves and/or interact with bank staff with their smartphones.
Additionally, Fifth Third’s recently completed acquisition of Chicago-based MB Financial will aid in expanding its digital capabilities.
Digital Offerings: Long-Term Benefit
In this digital era, Fifth Third’s initiatives to expand its technological reach will support growth prospects, and result in cost savings in the long term.
The company’s efforts to improve digital offerings have been increasing since late 2015, following the appointment of Greg Carmichael as its CEO. The company has witnessed a three year CAGR of 10.4% (2016-2018) in its technology and communications costs.
Driven by these efforts, nearly 50% of Fifth Third’s total consumer deposits are now done through digital channels. Additionally, about 90% of the customer interactions and 60% of the bank’s transactions are made digitally.
Further, over the past two years, Fifth Third has invested more than $100 million in several Fintech companies including Dobot, GreenSky and AvidXchange.
Stevens said, “We are building a bank that can thrive in the digital world. We take a lot of time to look at how we’re working inside our company and how we’re showing up for our clients and how to best anticipate their needs and meet them where they are on the devices they carry in their pockets.”
Shares of Fifth Third have rallied 4.6% over the past three months, underperforming 8.1% rise for the industry it belongs to.
Currently, Fifth Third carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Several other banks including Bank of America BAC, JPMorgan JPM and BB&T Corporation BBT are undertaking measures to expand digital offerings and serve customers better.
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