CINCINNATI — Fifth Third Bancorp plans to counter the threat of artificial intelligence tools that help consumers manage and move their money by incorporating similar services into its own apps, betting that customer relationships and bank-grade data security will help it retain deposits, a new report explaines.
Chairman, President and CEO Tim Spence outlined that response during the bank’s Oct. 19 third-quarter earnings call after being asked whether AI-driven cash optimization tools could disrupt deposits.
According to PYMNTS, Spence said technology that makes it easier to compare prices and move money poses the greatest threat to financial companies whose primary selling point is price. He pointed to online-only banks competing on deposit rates and wealth platforms offering sweep accounts with yields below comparable market alternatives.
Those products could face further pressure on already narrow margins as technology increases transparency and reduces the friction involved in moving money, he said.
Fifth Third, by comparison, is counting on its branch network, payment services, product offerings and customer relationships to give depositors reasons to keep their money at the bank, PYMNTS reported.
Bringing AI Services Into Banking Apps
Spence said Fifth Third intends to incorporate services such as identifying opportunities to save on subscriptions and helping customers budget into its apps.
The bank’s pitch will pair those capabilities with information security and separation between customers’ financial information and the information used by social platforms for advertising, according to PYMNTS.
Spence framed the competitive challenge as a race between established companies adopting innovation and newcomers building distribution. Fifth Third’s response is to bring useful capabilities to customers through banking relationships they already have.
Relationships Help Retain Deposits
Spence said about $2.5 billion in deposits on Fifth Third’s platform undergo a sorting process each month as customers make decisions about money arriving from paychecks or equity markets, leaving promotional offers or coming out of certificates of deposit, PYMNTS reported.
The bank retains about 80% of that money, he said. Of the retained funds, approximately 90% returns to deposit products, while 10% moves to a liquidity portal or investment account.
Spence said Fifth Third’s consumer checking relationships and commercial payments business help anchor those balances because customers use the money for ongoing financial needs.
“The money is operational. It needs to be here,” he said,
