Fifth Third ramps up tech hiring as banking goes more digital

Alexander Coolidge
Cincinnati Enquirer

Fifth Third is ramping up hiring of tech workers in 2019 as more customers bank on their mobile phones.

In the coming months, the Cincinnati-based bank will hire 200 new workers as it continues to invest in digital – a 20% increase from late last year. Digital-centric workers already accounted for one in seven of the bank's 7,000 area employees.

Fifth Third has invested more than $100 million in alliances with financial tech firms alone, while the bank won't quantify how much it's spending on in-house tech innovation. The push reflects not just industry trends but also the influence of CEO Greg Carmichael's tech background.

"We remain focused on accelerating our digital transformation and delivering innovative solutions for our customers," Carmichael told Wall Street analysts early this year. "We’ve invested heavily over the last several years... Our goal is to ensure interactions with the customers are simple, seamless and of course secure."

After completing its takeover of MB Financial in Chicago in March, Fifth Third is now the nation's 15th-largest bank with more than 1,200 branches operating in 10 states, including the upper Midwest, the Carolinas and Florida.

Outside Fifth Third Bank's ONE67 innovation center in its Downtown Cincinnati headquarters. The bank set the space aside to develop new digital initiatives.

Growing online transactions coincide with Fifth Third's trimming of its physical branch network. Last year, the bank shuttered nearly three dozen branches and plans to trim another dozen this year – on top of the 50 targeted for closure from the newly-acquired MB Financial in Chicago.

While Fifth Third plans to resume adding new branches in 2020, bank executives say their next-generation prototype will be 40% smaller and highly automated. The company plans to open 100 over the next three years.

Where does the money go?

So where is Fifth Third putting all this money behind tech?

The bank's investments span digital initiatives ranging from easier payments and lending to even venture capital investing. In 2017, the bank carved out 15,500 square feet of the fifth floor of its Downtown headquarters to create its ONE67 Center to serve as an innovation lab for future digital ventures.

Kimberly Brown (left) and Katie Dreyer at work in Fifth Third Bank's ONE67 innovation center at the Downtown Cincinnati headquarters.

The latest: Fifth Third this spring relaunched its Dobot savings app, which is heavy on graphics and light on statistics. The app allows consumers to automate saving a little money at a time for everything from a downpayment on a house to concert tickets.

Bank officials believe the app's simple focus and non-threatening presentation of financial data will attract younger consumers. Dollars saved are represented by dots on the screen, which Dobot head Andy Zurcher admits is a move to "game-ify" saving.

"It helps people prioritize but doesn't overwhelm them with the planning of their goals," Zurcher said.

Another appeal: you don't have to change banks to use it. The versatility works for both consumers and the bank: customers just link it to any checking account to start savings, but it gives Fifth Third another source of deposits because the saved money is held by Fifth Third. 

Fifth Third thought the app's appeal was so strong, it bought the start-up behind it – the bank's first-ever takeover of a fledgling dot.com firm.

Just weeks after its launch, 37,000 customers have downloaded Dobot.

 

The bank also keeps looking for ways to upgrade the regular Fifth Third app. Last year, it enabled the app to allow customers to withdraw cash from ATMs without their debit cards

In 2017, Fifth Third launched the Momentum app, which helps consumers pay down their student loan debt by rounding up debit purchases to the nearest dollar. So far, bank customers have paid down $2 million in debts.

Besides Fifth Third tech products, the bank is also investing in tech firm ventures that provide consumers additional services.

One of their largest so far: Fifth Third invested $15 million in New York-based CommonBond, an online student loan lender, which both finances and refinances loans and works with employers to help customers pay down debt.

Other tech investments include:

• Zelle, a person-to-person payments service (and a direct competitor of Paypal's Venmo)

• GreenSky, a point-of-sale financier for contractors and consumers for home improvement projects

• ApplePie Capital, a lender specializing in retail franchise operators

• QED Investors, a venture capital firm focused on tech firms in the financial industry

• Accion International, a nonprofit leader in micro-lending and socially-conscious "impact" tech investing in the financial sector

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For the latest on Fifth Third Bank, P&G, Kroger and Cincinnati business news, follow @alexcoolidge on Twitter.