Truist reduced expenses while prioritizing long-term investments in talent and technology in the third quarter.

The $548 billion bank’s adjusted noninterest expenses dipped 4.8% year over year to $3.6 billion due to merger cost savings, according to the bank’s earnings supplement. However, noninterest expenses increased sequentially by $33 million as the bank continued its investments in technology through its operations and mobile app.

“Overall, we continue to focus on generating expense reductions in certain areas to fund longer-term investments in talent and technology and to generate ongoing operating leverage,” Mike Maguire, chief financial officer at Truist, said during today’s earnings call. “We believe recent technology investments to enhance identity authentication, fraud detection, among other factors will mitigate operational losses.”

Also in Q3, the bank launched its artificial intelligence (AI)-based virtual assistant Truist Assist and started leveraging biometrics as an authentication method for the Truist app.

“We’ve made significant progress in our digital and technology areas, as evidenced by improving mobile app ratings and enhanced client experience within Treasury and Payments, and many other new features and capabilities that strengthen the financial confidence of our clients,” Chief Executive Bill Rogers said during the call.

Acquisitions and launches

Truist also during the quarter acquired benefits agency BenefitMall and finance company BankDirect Capital Finance.

“Both acquisitions are expected to be diluted initially. We believe they are strategic and financially attractive over the long run,” Maguire said, noting that BankDirect is expected to double the bank’s premium finance business and expand its capabilities to include life insurance as well as broaden its West Coast footprint.

The full impact of the acquisitions will likely be visible in the fourth quarter, he noted.

Looking ahead to Q4, the bank expects to continue seeing cost savings specifically as it embarks on its “final leg” of datacenter-related technology savings, which are expected to materialize during the quarter, Maguire added.

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PNC sees tech investment

Meanwhile, PNC’s noninterest expenses fell 9% YoY in Q3 to $3.3 billion but increased by $36 million sequentially “primarily reflecting technology investments,” according to the bank’s Q3 earnings supplement released Oct. 14.

For example, during the quarter the $547 billion bank closed its acquisition of point-of-sale and payment solution firm Linga, a cloud-based operating system which allows the bank to expand its digital resource capabilities.

The bank continues to expand, following its acquisition of BBVA, while keeping in mind its strategy “to grow customers with digitally-led banking,” according to the financial supplement.

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