Fifth Third Bancorp ranks No. 17 among the top 20 U.S. banks, with operations stretching from the upper Midwest to the lower Southeast. But even with that reach, the company must carefully consider its technology spending to better compete with much larger rivals.
“Fifth Third isn’t a trillion-dollar bank—I don’t have the IT capital that they have at JPMorganChase, where my counterpart there, Lori [Beer, global CIO of JPMorganChase], has a budget that’s 20x mine,” says Jude Schramm, chief information officer at Fifth Third. “And so for us to be nimble, we had to strategically lean into partnerships and do a little bit more buy than build.”
One partnership that explains Schramm's thinking is the deployment of commercial loan operations systems provided by financial tech provider nCino. Building that same system at Fifth Third would have taken five times longer and probably cost twice as much, estimates Schramm. In technologies in which the bank doesn't need to differentiate itself from rivals, and parity is good enough, he says, "I'm okay being with a partner."
Other vendors Schramm has tapped in recent years include Workday’s human resources software and generative artificial intelligence offerings from Microsoft, including the 365 and GitHub Copilots.
“We adapt ourselves to take the best of what those platforms have to offer,” says Schramm, who has a rule that Fifth Third customizes no more than 5% of any third-party platform. Every 10 weeks, the business and IT teams meet to align on their software development strategies.
When assessing software from vendors, Schramm coordinates closely with top executives at Fifth Third, including CEO Tim Spence and CFO Bryan Preston, to understand where they think technology is evolving and what can best suit what Fifth Third wants to address.
Fifth Third has no firm rule for how many vendors the company will work with and in some cases will seek shorter term relationships for technology that can be swapped out if better technology comes along. For core systems like what nCino offers, expectations tend to be higher. “We’re assuming we’re with them for decades,” says Schramm. “And so we choose those very carefully.”
Schramm joined Fifth Third after a 17-year tenure at General Electric, where he focused on digital transformation within the industrial manufacturing sector, including as CIO of the company’s aviation division. He joined the bank in 2018 to modernize Fifth Third's IT from the ground floor.
A five-year modernization plan has stretched on a bit longer than expected, complicated in part by the 2019 acquisition of smaller rival MB Financial and then the global pandemic. The early focus for Schramm included investing in new data centers and upgrading mainframe computers, which he described as ”boring hard work—but it’s the stuff you have to do.” With a more solid foundation, along with a cloud partnership with Amazon Web Services, Schramm was able to lean more into his “buy” strategy.
Schramm is seeing some encouraging results, including “measurable” productivity gains that allow fewer employees to attend meetings, with AI systems now sharing notes from those meetings and action items. Microsoft Copilot has been deployed to about 14,000 workers and around 5,000 of them use it daily. Meanwhile, nearly 450 engineers use GitHub Copilot.
Another 100 employees are also testing Microsoft’s M365 Copilot, which integrates with Word, Excel, and other office-focused applications. Humans remain in the loop for all actions that require a decision and Fifth Third hasn’t yet adopted generative AI for use with its external customers.
And while some tech leaders have scoffed at the $30 per-head, per-month cost for many generative AI productivity tools, Schramm says it is important to invest early on AI, especially with large partners like Microsoft. The bank is also frequently talking to AI startups, both in fintech and for narrow applications that could benefit departments like legal, but remains on the sideline until the use cases are more clearly defined.
“We have a strong belief in experimentation,” says Schramm. “We’ve got a motto here to get 1% better every day.”
John Kell
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