Truist counters higher personnel expenses with money-saving cloud integration

Dive Brief:

Adjusted expenses for Truist in the second quarter rose by 3.8% due to investments in talent, technology and insurance-related incentive compensation, Bill Rogers, the bank’s CEO, said Tuesday during an earnings call.
Company expenses increased for several reasons including travel, compensation packages and investments. “We have planned products, processes and technology enhancements underway to reduce these losses and enhance the overall client experience, including the launch of innovative authentication approaches later this quarter,” Rogers said, according to a Seeking Alpha transcript.
The bank’s recent technology investments include a reality lab featuring virtual and augmented reality, and Long Game, an acquisition that gamifies mobile banking and positive financial behaviors. Additionally, the Charlotte, North Carolina-based bank has rolled out Truist Assist, an automation project to help mobile customers via bot. And it has expanded LightStream, a cloud-based deposit product.

Dive Insight:

Truist opened its Innovation and Technology Center in June. The center handles nearly 6 million client interactions every day — 87% of which are digital, the bank said.

The bank has an on-site “reality lab” that features virtual and augmented reality technology, as well as spaces for real-time responses to clients.

“We're shifting millions of hours of integration-related activity to improving our client experience through investments in digital and technology, simplification of our processes and operations and, of course, by continuing to activate our purpose each and every day,” Rogers said.

The talent crisis and labor shortages within the technology industry affect businesses’ bottom line. The bank reported a $64 million increase in personnel expenses due to first-quarter compensation increases, seasonally higher insurance-related incentive compensation and “ongoing investments in talent across our lines of business and technology teams,” said Daryl Bible, Truist’s CFO.

While these investments in technology have costs, the bank said it’s also the way they plan to save money.

Moving more applications to the cloud generates savings for the company, Bible said. As Truist examines front and back operations, the company sees digitization and artificial intelligence projects as important aspects of its operation, Bible said.

“It gives us comfort that our expenses will be contained over the next year or two,” he said.