Capital One’s layoffs and banks’ earnings call comments help quantify the progress of their tech transformations.
Recent personnel news and banks’ fourth quarter earnings contain hints on how much FinServs are spending on technology and how tech improvements are making a dent in their businesses.
Capital One is laying off 1,100 people from within the agile development group of its tech department – but counter-intuitively, the bank says it’s a sign of progress for its larger transformation initiative: It has learned to apply the relevant frameworks to its development, it said, to increase its overall “collaboration and delivery speed.”
“The agile role in our tech organization was critical to our earlier transformation phases but as our organization matured, the natural next step is to integrate agile delivery processes directly into our core engineering practices,” Capital One said, adding that affected workers can apply for other open tech roles across the org.
In addition to Capital One’s personnel news, the latest earnings cycle – and bank CEO’s comments at Davos last week – gave us another peek behind the curtain at how big FinServs are quantifying their digital transformations.
Citizens Bank announced its “Top 8” strategic program, which includes cloud migration and closing data centers and standardizing its tech platforms, and which it estimates will have a “run rate of about $100 million of pre-tax benefits by the end of 2023, with that split about 80-20 between efficiency and revenue-oriented initiatives.”
PNC said it’s increasing its annual technology development program goal to $400 million, Fifth Third said it will grow its technology expenses by 10% to support its digital transformation, including to “drive automation into our most labor-intensive processes,” and Wells Fargo’s tech spend reached $902 million in Q4 as it aims to cut down on its “huge amount of manual processes” and “duplicate systems.”
Meanwhile, Ally Financial said it would be looking to fintech layoffs for talent, JPMorgan’s Jamie Dimon said the bank was still in “hiring mode,” and Citi CEO Jane Fraser said that she supports workers having hybrid work privileges, but they’ll be asked to come back into the office for coaching if the bank finds that their productivity is slipping.