Dive Brief:
- Operational costs were high at Truist this past quarter, partly due to the bank’s decision to refund clients for fraud losses, according to Bill Rogers, CEO of Truist, speaking Tuesday during the company’s Q3 earnings call for the period ending Sept. 30.
- In order to curb the phenomenon, Rogers said the company has invested part of its technology spend on security efforts such as identity authentication and fraud detection.
- “I acknowledge that operating losses continue to be too high,” Rogers said, according to a Seeking Alpha transcript. “However, other expense growth reflects targeted investments in talent and technology in key areas of long-term sustainable growth.”
Dive Insight:
While the bank is ramping up security measures and dealing with higher than expected operational costs, the company continued to echo statements from last quarter that technology was the key to lowering costs.
“Overall, we continue to focus on generating expense reductions in certain areas to fund longer-term investments in talent and technology and to generate ongoing operating leverage,” Mike Maguire, CFO at Truist, said. “As an example, we believe recent technology investments to enhance identity authentication, fraud detection, among other factors, will mitigate operational losses.”
Some savings from data center-related spend are expected to materialize throughout Q4, according to Maguire.
Truist acquired Zaloni, a data management software start-up, earlier this year with the goal of improving the company’s data infrastructure in its hybrid cloud environment.
The bank is looking toward technology to ease customer experience as well. Last quarter, the bank touted the results of its technology center, the anticipated rollout of Truist Assist and the continued expansion of its online consumer lender LightStream.
By the end of Q3, Truist Assist, its in-app and online AI-enhanced banking assistant, was deployed to 114,000 unique clients totaling 147,000 interactions “that otherwise might have occurred in a branch or contact center,” Rogers said.
The newest project with LightStream will focus on underwriting models through AI and piloting a savings product to broaden its capability set, Rogers said.
