Citizens CEO: Fintech partnerships will keep bank competitive
Philadelphia Business Journal
By Jeff Blumenthal
22 April 2019
When announcing their $28 billion merger of equals in February, BB&T Corp. and SunTrust Banks said the deal was partly designed to allow the banks to become more competitive with larger rivals in technology.
At more than $220 billion in assets, both are larger than $160 billion-asset Citizens Financial Group, one of the Philadelphia region’s largest banks. But like BB&T and SunTrust, it is significantly smaller than the nation’s Big 4 banks— JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co. and Citigroup, each of which have assets near or exceeding $2 trillion and have invested heavily in developing consumer-facing technology such as artificial intelligence-powered chatbots and digital investing apps.
Citizens Financial CEO Bruce Van Saun acknowledges the challenge but believes his bank has made a significant push to keep pace with its larger competitors by partnering with more than a dozen fintech companies in recent years.
“I think we have sufficient scale to stay competitive,” Van Saun said in an interview after Citizens Financial announced a 13 percent increase in net income during the first quarter. “But it will be worth watching to see which banks will continue competing in five years and which ones won’t be.”
Since taking the reins and spinning the bank off from former owner Royal Bank of Scotland via an IPO five years ago, enhancing technology has been a prime focus for Van Saun.
In the first quarter alone, Citizens entered into partnerships with four different fintechs, adding to the 10 existing relationships it established in recent years: Transactis (payments technology for treasury solutions), mortgage platforms Blend and Vast and corporate liquidity investment platform Cachematrix.
The partnerships stretch across the bank’s business lines, such as SigFig, an investing platform for its wealth management clients and Fundation, which makes it easier for small-business customers to apply for loans.
At the same time as it’s struck fintech deals, Providence, R.I.-based Citizens, the Philadelphia region’s fourth-largest deposit taker, has increased its in-house capabilities, such as building a new digital and online platform based in large part on the work of its own digital technology employees. It also launched Citizens Access, a nationwide online banking service focused on the collection of deposits that has reeled in $4.6 billion in deposits in its first year. Citizens has about 30 analysts and programmers working on its consumer digital platform, and it plans to hire 45 more this year.
Brian Klock, an analyst from Keefee Bruyette & Woods, said tech platforms can most helps banks is on the consumer side.
“Most consumers largely bank online, so technology on scale and having the most up to date technology is impactful with consumer banking,” Klock said. “But no two companies are the same so there is no algorithm that is going to be a solution for every business customer. So you still need personal relationships for business banking.”
Van Saun said the advancement of AI had not led to a reduction in the number of employees. Citizens Financial employs roughly the same number of people it did five years ago — about 18,000 — but has changed about 3,000 positions from old roles that no longer fit to new ones that are largely customer facing.
While the newer, tech-centric employees are largely paid more than those who departed, Van Saun said the math still works in Citizens’ favor because of improvements in productivity.
“AI has an incredible presence but you have to be selective in how you deploy it because sometimes the cost does not equal the benefits,” Van Saun said. “But it can save hours or research.”

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