Santander Bank is increasing efficiency and boosting sales even as it cut its technology spend by 10% in the second quarter. 

“We are transforming the way we operate to become a digital bank with branches,” Chief Executive Hector Grisi said during the $1.9 billion bank’s earnings call today. “It enables us to match the customer experience of digital-only competitors while offering personalized support and advisory through our branch network.”

Madrid-based Santander reported tech expenses of 556 million euros ($637 million) during the second quarter, down 10% quarter over quarter. 

Grisi did not address the lower tech spend in the call. 

The bank is undergoing its multiyear ONE Transformation digital transition, which includes building a global tech platform encompassing back-end tech, such as migrating its core and data to Google Cloud, and implementing AI to boost efficiency. 

“A key initiative is our new AI-based global [customer relations management software] already being deployed across the group,” Grisi said. “In Spain, we completed the rollout of [the AI-driven] CRM in the branch network during the quarter, boosting agent productivity by 23% in our assisted channels.” 

Global transformation of the company’s tech stack has generated 87 basis points in efficiency so far this year, Grisi said. 

The bank reported an efficiency ratio of 41.2% during the second quarter, down from 41.8%, according to the company’s earnings. 

DORA regulations 

While the bank is continuously investing in revamping its tech stack, it is also keeping up with changing regulations like the Digital Operational Resilience Act (DORA), which was implemented in January and aims to build a resilient digital financial sector in the European Union. 

DORA is an EU regulation aimed at ensuring financial entities can withstand and recover from tech-related breaches and outages by requiring them to develop a business continuity plan. 

The ruling builds on existing regulations to strengthen digital resilience across the financial sector and IT service providers, the spokesperson said, adding that the bank is in compliance with cybersecurity requirements.  

“We think that this common regulatory framework will help not only financial sector organizations, but also their third-party providers, to guarantee the continuity and quality of its services in the face of operational disruptions,” a Santander spokesperson previously told Bank Automation News. 

Big financial institutions are better prepared for DORA because they have tech budgets available to adapt as financial regulations change, Madelein van der Hout, senior analyst at think tank Forrester, told BAN.  

“For smaller institutions, DORA is not just a matter of adjusting existing procedures but often requires an extensive overhaul of their approach to cybersecurity,” van der Hout said. “Many of these organizations lack the dedicated teams or resources that larger institutions have at their disposal, making compliance a more complex and resource-intensive process.” 

The bank reported $5.02 billion during the quarter, up 4% year over year, according to the bank’s earnings report.

MARKET REACTION: Shares of Santander (NYSE: SAN) were up 1.69% from market open to $8.75 as of market close today. SoFi has a market capitalization of $130 billion.