KeyBank is on track to cut costs in 2023 as the bank worked to make room for investments in customer acquisition technology and embedded banking in the first quarter.

In Q1, KeyBank’s noninterest expenses increased by 4% to $428 million, according to the bank’s earnings supplement. However, the slight increase does not seem to affect the bank’s outlook for cost savings in 2023, Chief Executive Chris Gorman said Thursday during the bank’s Q1 earnings call.

“Our noninterest expense outlook is also unchanged,” Chief Financial Officer Clark Khayat said during the call. “We expect it to be relatively stable, driven in part by the actions we took last quarter to accelerate cost savings, which includes the impact of the $64 million in restructuring charge.”

THE BIGGER PICTURE: In Q4 2022, the bank predicted a cost reduction of 4% for 2023 to accelerate tightening expenses, Gorman said during the bank’s Q4 2022 earnings call in January, noting, “In 2023, we will pursue cost opportunities across our company, including areas where we can leverage technology, automation and process improvement to reduce redundancy, improve efficiency and enhance effectiveness.”

BY THE NUMBERS: KeyBank reported in Q1:

• Total revenue inched up 1% YoY to $1.7 billion; and
• Equipment expenses fell 4% YoY to $22 million.

FLASHBACK: KeyBank deployed robotic process automation (RPA) to block fraudulent bots from carrying out fake transactions, Michael Reynolds, business technology senior manager of service digitization at the bank, said at Bank Automation Summit Fall in September in Seattle.

The bank’s cybersecurity efforts help detect, flag and report false transactions immediately, Reynolds said.

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