Fifth Third Bancorp ranks 17th among America’s 20 largest banks, with operations stretching from the upper Midwest to the lower Southeast. But even with that reach, the company needs to carefully consider its technology spending to better compete with much larger rivals.
“Fifth Third is not a trillion-dollar bank — I don’t have the IT capital that they have at JPMorgan Chase, where my colleague there, Lori (Beer, JPMorgan Chase’s global CIO), has a budget 20 times larger than mine,” says Jude Schramm, chief operating officer. for information at Fifth Third. “In order to be nimble, we had to strategically rely on partnerships and buy rather than build.”
One partnership that explains Schramm’s thinking is the implementation of a commercial credit operations system provided by financial technology provider nCino. Building that same system in the Fifth Third would take five times as long and probably cost twice as much, Schramm estimates. In technologies where the bank doesn’t need to differentiate itself from its rivals, and parity is good enough, he says, “It’s good for me to be with a partner.”
Other vendors Schramm has used in recent years include HR software Workday and generative artificial intelligence offerings from Microsoft, including 365 and GitHub Copilots.
“We adapt to take the best of what those platforms have to offer,” says Schramm, who has a rule that Fifth Third adapts no more than 5% of any third-party platform. Every 10 weeks, business and IT teams meet to align their software development strategies.
When evaluating vendor software, Schramm coordinates closely with Fifth Third’s top executives, including CEO Tim Spence and CFO Bryan Preston, to understand where they think the technology is going and what best fits what Fifth Third wants to solve.
Fifth Third does not have a hard and fast rule on how many vendors the company will work with and in some cases will seek shorter relationships for technology that can be replaced if better technology emerges. For entry-level systems like what nCino offers, expectations tend to be higher. “We figure we’ve been with them for decades,” says Schramm. “And that’s why we choose them very carefully.”
Schramm joins Fifth Third after 17 years at General Electric, where he focused on digital transformation within the industrial manufacturing sector, including serving as CIO of the company’s aerospace division. He joined the bank in 2018 to modernize Fifth Third’s IT from the ground floor.
The five-year modernization plan took a little longer than expected, and was partly complicated 2019 acquisition of smaller competitor MB Financial and then a global pandemic. An early focus for Schramm included investing in new data centers and upgrading mainframe computers, which he described as “boring drudgery – but those are the things you have to do.” With a firmer foundation, with a cloud partnership with Amazon Web Services, Schramm was able to lean more heavily on his “buy” strategy.
Schramm is seeing some encouraging results, including “measurable” productivity gains that allow fewer employees to attend meetings, and AI systems now sharing those meeting notes and actions. Microsoft Copilot has been implemented on about 14,000 workers, and about 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 has not yet adopted generative AI for use with its external customers.
And while some tech leaders have scoffed at the $30-per-month price tag for many generative AI productivity tools, Schramm says it’s important to invest early in AI, especially with big partners like Microsoft. The bank also often talks to AI startups, both in fintech and for narrow applications that could benefit departments like legal, but remains on the sidelines until the use cases are more clearly defined.
“We’re big believers in experimentation,” says Schramm. “We have a motto to be 1% better every day.”
John Kell
Send opinions or suggestions to CIO Intelligence here.
NEWS PACKAGES
Intel’s CEO is leaving the beleaguered chip maker. Pat Gelsinger what forced to retire as CEO less than four years after returning to head Intel after successful leadership stints at VMware and EMC. Intel has spent money, laid off thousands, suspended its dividend to save money, and has fallen far behind AI chip makers like Nvidia. In August, under Gelsinger, Intel’s stock fell more than 25% in a single day — its worst day since 1974 — after a poor earnings report. There were two main managers appointed co-executive directors to replace Gelsinger on an interim basis while management searches for a permanent successor.
The Blue Yonder ransomware attack is now in its second week. Over the weekend, supply chain software company Blue Yonder revealed that he was “progressing well” is recovering from the ransomware attack, saying that “several” affected customers have been brought back online and that it continues to actively work with other customers to restore normal operations. Regarding ransomware attacks in general, “We were getting five major attacks a year in 2011, now we’re getting 20, 25 major attacks a day,” David Wall, professor of criminology at the University of Leeds, says the The New York Times.
UK lawsuit seeks $1.25 billion in damages from Microsoft over cloud fees. Class action lawsuit alleges that Microsoft charges AWS, Google and Alibaba Cloud customers higher fees than those using the software giant’s own Azure cloud computing service. Meanwhile, in the US, the Federal Trade Commission is allegedly opened an antimonopoly investigation in allegations that Microsoft imposes punitive licensing terms to prevent users from moving their data from Azure to competing platforms. Microsoft declined to comment Wealth and the lawsuit and the reported investigation.
Amazon unveils new features and products for AI and computing. At its annual re:Invent conference this week, Amazon announced a steady stream of product news and cameos, including a rare appearance from Apple, which touted AWS’ custom AI chips for services such as search. Amazon too rolled out chip clusters which will make it easier for AI partner Anthropic to train the large language models needed for generative AI. Amazon also boasted that it could make data centers work more efficiently, with updated cooling systems that can integrate air and liquid cooling. AND new security service Amazon also debuted this week and will look to shorten the time it takes for a company to recover from cyberattacks.
ADOPTION CURVE
Most companies have not reached the end of their responsible AI journeys. This was revealed by research by Accenture and Amazon Web Services 72% of companies embarked less than two years ago on the so-called journey of responsible artificial intelligence, effort to put policies in place that can help them reduce risk and stay compliant. But Accenture estimates that it typically takes five years to reach “maturity” when it comes to responsible AI, including data and risk management controls, real-time data monitoring and robust oversight of third-party AI vendors.
This may explain why 56% of Fortune 500 companies still cite AI as a “risk factor” in their annual reports, up from just 9% a year ago. Among those flagging AI risks, 74% of companies surveyed by Accenture and AWS had to temporarily pause at least one AI or generative AI project in the past year.
JOBS RADAR
Recruitment:
– New York State Office of Information Technology Services is I am looking for a deputy chief technical directorbased in New York. Posted Salary Range: $137.5K-$173.7K per year.
– Ripple is is looking for a director of corporate ITbased in San Francisco. Reported salary range: $201.6K – $252K per year.
– S&P Global is seeks CTO for automotive forecastingbased in Trenton, NJ. Published salary range: $157.9K-$315K per year.
– Univision is is looking for a Director of Technologybased in Fresno, California. Published salary range: $120K-$128K per year.
Employees:
