A consistent focus on improving the efficiency of technology solutions and processes to lower costs provides Fifth Third Bank ($111 billion in assets) with IT budget savings that the Cincinnati-based financial institution then invests in new products and services, relates CIO Raymond C. Dury. "We challenge ourselves to improve efficiency and then take that money, perhaps add to it, and focus on new projects," he explains. "We look to get efficiencies out of our environment."
As a result of past initiatives aimed at efficiency improvements, Dury expects the percentage of Fifth Third's IT budget dedicated to new initiatives to increase over the next few years relative to expenditures on maintenance. "We made some investments about four years ago that gave us a really solid foundation to drive efficiencies in the environment," he explains. "We're still reaping the benefits of that, so our percentage of maintenance costs is going down, which makes more funds available for new products and services."
When determining how to spend that money, Fifth Third's IT organization looks at ways to support the revenue goals of the business, Dury adds, noting that the spending process at Fifth Third is quite democratic. "We invest in all areas of the bank rather than focus on a single area at the expense of the others," he says.
In addition to looking internally at revenue goals, Dury continues, his IT budget also is based on the outside environment. Although the bank did not have subprime loan exposure, according to Dury, it has been sensitive to the general economic conditions impacting all financial institutions and has been investing in risk and loan pricing initiatives over the past year or two.
"We anticipate the conditions and make investments as needed," Dury says. "We are duly cautious and not overly reactionary."