Bancanalysts Association of Boston's Annual Bank Conference - FIFTH THIRD BANCORP

We're good? Let's go. All right. We'll get started again, keep it moving here. Thanks, everybody, for joining us. Please introduce, we've got Fifth Third here with us. This is a really interesting time. We have what feels like an accelerating pace of change in technology, integrating with banking, more than just the back office, moving through to the front office, and client experience. So really pleased to welcome here with me Brian Preston, the CFO of Fifth Third, and Jude Schramm, the Chief Information Officer. The fifth third. So thanks for coming to Boston. Thanks for being here with us today. Absolutely. Thanks. Thanks for having us. Great to be here. Before we get into the technology stuff, we do have we did just finish the major integration of Comerica. Congratulations, by the way. Seems like it went really well. Thank you. Maybe just talk about what what it means for the franchise broadly in the future. Like what are the biggest opportunities from here to create value with the combined franchise that maybe didn't exist at either one independently yeah i think um one of the things that's been really good about this transaction is when we look back and think through the uh the investment thesis on why we thought this transaction made sense for fifth third and how it could make us a more powerful franchise going forward all the things across the horizons you know we talked we talked about it as a deal for across time horizons a deal that works today a deal that works in the near term, and a combination that really is going to be a platform for growth in the future, all of that thesis has played out for us in a way that is looking even more powerful than what we originally thought. The strength of the Comerica middle market franchise, we can just see where it was being held back by the constraints that the company faced from a liquidity and from an expense capacity perspective, and the things that that company needed to be better and to take advantage of the opportunities and the fabulous markets it had access to are all the things that we have been good at executing over the last decade all the investments that we have been making to get better at analytical deposits at building de novo branches at deepening relationships from a middle market banking perspective that the product set that actually allows you to sell on value all of those things are the things that are going to be necessary for us to be successful as we grow into texas And that opportunity looks even bigger than what we thought. You look at the early deposit campaigns when we were doing marketing under the Comerica brand. The response rates were fantastic and we're excited about the new campaigns that we're going to be able to do under the fifth third brand and the fifth third products. And same thing in the middle market banking space, like the opportunity there from a growth perspective. Texas is now, from a middle market banking perspective, is our third largest market from a middle market bank perspective. Michigan is the largest. It's one of the fastest growing markets, even in a year of integration for us. I think it's going to be bigger in middle market baking probably within the next 12 months than Michigan. So it's that quickly going to become one of our fastest markets. And so the opportunity is tremendous, both from a balance sheet growth perspective, and then deepening from a fee perspective, because the products that we bring are really resonating. Our team's had a, you know, it's a long year integrating a transition, a transaction like this. And, you Know, we can't say enough great things about what our team has accomplished. And the team is really excited about growth from here. Awesome. And so now we're through integration. So obviously, everybody wants to know what's next was the end, you talked about the opportunities. How do you frame that in terms of what it means for fifth third relative to what you think kind of the industry is kind of like the growth profile, the earnings profile? What does it mean for earnings as we look out over a few years, whether it's through a cycle or not through a circle? What does this actually mean, ultimately mean for investors? Yeah, we have engineered a business model that has put us in a position to deliver what we think are going to be top returns through the cycle you know 53% efficiency ratio that actually allows us capacity to continue to invest for growth 19 percent 19 plus percent ROTC e based off of the business mix that we have today that doesn't require things like concept of credit normalization like that is what this franchise can deliver and now on top of it you actually have the markets to invest in and accelerate the pace of organic deployment of capital which is the best way for us to deliver value for our shareholders over the long run so we just think it puts us in a position to just start compounding book value at a faster and faster pace because the operate the growth opportunities resident in these markets are far above where fifth third was a decade ago you know you look at our footprint you know in the mid 2010s predominantly Midwest you know we had kind of the green shoots of the southeast investments so much of of our growth capacity and production capacity now are in markets that carry a growth rate above what would be the national GDP. So when we think about a business that should be growing at nominal GDP plus a point or two, the region advantage, the economic advantages of the regions of where our investments are today just puts us in a position that we think that few other banks are in from a growth potential perspective. And you've talked about a lot of these growth potentials. You have the new Texas markets, you've got innovation banking, payments, wealth. We have your legacy markets where you're still really focused on. How do you prioritize investments across all these opportunity sets? Because there's a lot going on now. Yeah, and it's the prioritization is one of the most important decisions that we make as a leadership team and really trying to understand where are the opportunities to concentrate in your investments and the things that are going to make the biggest difference for the company from a long-term perspective. You know, we talk a lot about having a limited number of priorities that we invest in consistently. That's what's driving the performance you're seeing from the company today. The retail deposit performance that we are fortunate enough to be able to brag about, that's because of a decade of investments that we've layered in over time. And we've learned and we've improved and we're optimized. And then once we prove out of methodology, we figure out how to lean into it even further. And so we have these vintages of growth. We talk a lot about the coiled spring. We're in the middle of a virtuous cycle where those prior investments are feeding that next round of investments. And so to make that work, though, you've got to be very disciplined on a handful of things that you're going to do very well. And our prioritization is around, one, we think consumer households and consumer checking is a foundational point from an attachment point perspective. So we want to be great at that. So you're always going to see us invest in those capabilities. And we think the attachment points in middle market banking is another thing that drives significant returns for us. Lending and bankers is always a way that's a great attachment point. But we've added another one with commercial payments. Having leading products where commercial payments can be an attachment point, for us, we believe, is a differentiator as well. No, that's great. And maybe as a live example, we did have some extra, you outperformed Comeric on the synergy of the expense-save opportunity. and reinvested some of that back into the front line, effectively, like opportunities. Maybe that's a good example. Where do you think about incremental earnings falling to the bottom line? Where do YOU think about reinvesting them into the future? What's that trade-off look like? How is that trade off made here? It's always done at a very granular and analytically grounded approach. We're trying to balance making sure that we're delivering on the commitments that we are making to our shareholders, but also making sure that we invest in the company over the long run. Our industry is an easy industry to harvest, and that's one of the things that we've tried to make sure that we continuously do, which is invest in customer acquisition and invest in growing the production capacity of the company. What that means is we're never fully kind of pedal to the metal, full steam ahead. There's always some, whether it's marketing campaigns and incremental deciles that we feel like we can mail into, we're balancing that, delivering near-term results and making sure we're investing for the future. What is nice today is there are more opportunities for us that we believe are returns accretive and for us to be able to grow in a compounded way over time that we're going to beable to lean into on a marginal basis a little more. The other aspect of our model is everything that we do is very modular. These are approaches where it's one branch at a time. It's one marketing campaign at a top. And so when we see that the performance is changing, we change our tactics. So we're not committing the franchise to unsustainable cost structures. We have the ability to adjust. And when we reach a point in time where those marginal decisions aren't accretive for shareholders, we're able to adjust and then let that drop to the bottom line or return that capital to our shareholders. Great. Jude, we'RE lucky to have you with us here today. Brian, we'Re always lucky to be here. But Jude,we see a little bit less of so maybe we'll give you a chance. Look, technology, the role of technology in banking has been changing over the last five, 10 years, and it seems like it continues to accelerate. Just maybe talk about your role at Fifth Third and the role OF Technology at Fifth Thread as you see it. Sure, yeah, and thanks for having me here. I do appreciate it, Matt. You know, it has changed a ton, and when you think about the role Of Technology in a bank, one of the things I try to always reference back to is when Darren King, our head of commercial banking, joined the bank. Him and I were talking for the first time, and he asked me, are we a bank or are we a software company, and I said, let's be clear, from my opinion, we're a bank, which was the right answer, by the way, from Darren's perspective, but I think it's important, because what I think it does kind of highlight is, you know, technology is becoming increasingly a very important part of the way every one of our customers have an experience, their relationship with the bank, and it doesn't matter if they're in the consumer side, the commercial side, or the wealth side, but the way I try to think about it is, IT's really got to be really and I'm a historical, more industrial guy, we have to be the supply chain of the bank. You know, the way that we have to set up our infrastructure, the way we have to make sure that we are trying to remove friction, build resiliency, and deliver those experiences to customers so that they have the money where they want it, the way they want It, so they can use It the way They want to use It is all a function of how we really architect our IT infrastructure to deliver those capabilities and those experiences to them. And so that's what I think about. again it's it's a supply chain it's resiliency it's speed it's agility for the company i think it really showed itself in the comerica conversion because you think about from deal announcement to really conversion was about 11 months that's a pretty significant pace to do something of that magnitude beyond the the brilliance of the people that were involved from the leadership of both companies and all the people who made it happen the modernization of our tech is what i think helped us accelerate through some things that typically would take a very long time that we did And, you know, it would take years, took months to get done. Awesome. I don't want to resurface any budget wounds that might have happened in the last budgeting. It's like, well, maybe this is a good chance to talk about... Actually, conversions are great budgeting. Yeah, that's right. Maybe this is good chance talk about the technology roadmap and how you, how that balance of where are we investing because we need to invest to keep pace, where do we invest for incremental capabilities and how does that trade off work with like the budgeting process and the investments that you choose to prioritize? Like, just kind of walk us through how you think about those prioritizations. Yeah, sure. You know, one of the things that we've had in place for quite a while, and I give a lot of credit to Brian for leading us through this, is we kind of look at our IT budget in three big chunks. There's really what we call protect the bank, there's run the bank and there's advance the bank. And we try to segment the work that we do across all of our teams into those three buckets. And then we allocate our tech spend in a guided kind of percentage we think is the right investment into those different segments of the budget. but there's an underlying process that works for us really well it's a continuous process that allows us to bring things in front of the leadership so we are in meetings every week looking at investment and tech spend to really look at a are we optimizing the spend and getting the most efficiency out of it in the way we think about allocating that that capital or that expense into the the tech spend we also want to see the outcomes we're a very outcome driven organization so it isn't really like just me and my team wanting to go spend money on new platforms or on new solutions. The business comes together and we bring a business outcome and that is what we use to lever the prioritization of what we're going to invest the tech in because that's going to allow us to really anchor what we'RE investing in toward the future growth and what Brian was talking about with the franchise so we can really underpin that and back it where we need to and then we have the agility because of the frequency to have to pivot that when we have to. If the market changes, if a dynamic changes, America's a great example, we were able to really ramp down advance the bank for a little period of time so we could focus on merge the bank and that's what became a big pivot for us while not sacrificing protect and run. Awesome. I can't have you on stage and not ask about AI. So maybe just talk about where you're seeing the biggest opportunities for AI at Fifth Third, how it's being deployed and how you're thinking about the opportunity there. We're taking a pretty inside out approach to AI. Two years ago we deployed like probably most of you have Microsoft co-pilot to all of our knowledge workers so we have about 13 14 thousand employees using that every day the goal there was really to get them two things I think one is it's a cultural thing we're getting the company used to these tools and experiencing how they're going to interact with these things as we expand more of the business and use cases that we do over time and so we've been investing in that now for a couple years in my world a hundred percent of our engineering workforce is required to use AI so we actually track that we measure it and that is where we're starting to see probably the earliest returns and outcomes we are we're seeing about 40 percent of our code being produced by AI in a given we call planning increments about 12 week sprints for our teams about 90 percent of the testing is being done with AI and what we're saying is you know roughly a 20 to 30 percent productivity gain and the way we measure that in that world is velocity it's how much more can we get done and while increasing the quality of what we're putting out as well and so that's our measurement for for how we're able to take AI and use it to really get our engineers to be able to meet more demand from what we want to do for driving better experiences for our customers and then if you kind of expand through that the other place we're really investing they've been investing even through the conversion is looking at how we bring it to our customer experience our chat bot on our consumer app called genie today is more traditional AI, but starting this quarter and into the first half of next year, we're going to be transitioning that to an agentic capability where Genie will be able to be completely agentified and be working with consumers, and we'll just keep growing that experience. It'll come out of the chatbot at some point. It will be more of the interaction in a normal way over time, and that's the way we see that growing, and the pacing in that's going to be our comfort with that, our customers' willingness and desire to want to have those different interactions, and so we're gonna be able to pace that how we want but that's I think the frontier and where he has gonna be going over the next couple years for us great and when we think about the the economic opportunity here for fifth third like what is it what's the big prize and how does it evolve like is it you know lower cost is it better customer experience like what what are we playing for here economically I do think it's going to be disruptive enough that it's gonna manifest itself into all of those ways You're going to see, I think today our early focus is scale, and it's increasing capacity. We want our employees to be more effective, meaning can we give them these tools to be more efficient in what they do, more productive? Can they get more done with the same amount of people? Can we continue to grow the franchise at a clip that we want to, and you look at some of the back and middle office and try to hold some of that as relatively flat as we can, but we can invest more in the sales and in the people where we need to grow, to grow the top side of the business. And that's going to be an important part of that for us. And I think that's a big focus for us early on. But over time, you're going to be able to see, is there going to being efficiency in harvesting AI to do more work where we maybe do some parts of the bank with fewer people? There's going to be new jobs, new things that we're going to find to do. And finally, I think if you can use this to increase the velocity on the front end, our product capabilities are going to help us drive top-line growth. And sometimes it's going to give us a chance to grow because we can get things to market quicker. And we can be more innovative in what we're doing and find new ways to drive you know customer stickiness and grow deep in relationships as well as find new that's great so in five years if we were to if you were to look at the the industry do you think ai is kind of table stakes everybody's plus or minus or are there ways to dive like kind of more durable competitive advantages or any like longer term competitive opportunities i think five years now it's going to be table stakes i think your point about competitive advantage to me i think is going to b you've got to be right now being ready to be a little bit closer to the first mover side, because I do think there's a point where if you can get out in front and you can use this to establish some competitive either ability to grow or to retain customers as we go through this transition, you're going to get some escape velocity. It's going to be really hard to catch up, and that's what we'd like to continue to think about as we invest in where we're putting AI in the customer hands and the experiences. Yeah, I think AI as a productivity play from an efficiency perspective is 100% going to be table stakes. It's going to Be a path of how institutions lead. And when you think about an industry where our raw materials are capital and liquidity, the ability to operate a lower cost model allows you to deploy the same capital and earn a better return for the same risk. That is a differentiator. That is going to BE table stakes with AI. I think what changes is that AI gives us an ability to change the value prop with our customers in terms of the types of services that we can provide and the types of problems that we solve for our customers and in a completely unique way, whether that is the advice that we provide or the ways and paths we give them to interact with us. That to us, we think, is going to be the bigger differentiators, people that really understand how to unlock that incremental value that they can provide to their customers is going to be a huge differentiator going forward for growth. And how inside of a bank do you balance the desire to do all of this quickly with all the data, the governance, the important things we have in terms of just being a bank? How do you balance that? I think from a technology perspective, a couple of things. One is because of the investment we've made in modernizing the underlying bank platforms that we have and having our environments both on-prem in modern data centers as well as in the cloud with our partners we have the infrastructure in place to scale ai very quickly i think the gating factors for us aren't going to be investment in more infrastructure it's going to to kind of your point how can we make sure we have the controls how can make sure that we have governance in place to get comfortable with the different experiences where we're going to expose ai either internally or to our customers And those will be more of the pacing factor than the technology itself. The one interesting thing about AI is you all, I'm sure, are experiencing yourselves either in your personal lives or at work. It is not hard to enable and to turn it on, right? It's the one technology evolution that isn't going to require this massive build-out from an IT shop inside of a company. Because if you're already modern, if you'RE already in the cloud, if YOU'RE already there, now it's about basically turning it on and then controlling it. And so, you know, when you move the cloud, when you went to mobile, when these things, you had these massive infrastructure built out that took years. You don't have that. That's why I could enable 13,000 employees with AI in 60 days. I think the gating factor is gonna be the controls that have to be in place because that is the one thing that it is outpacing. Globally is the real understanding of its potential impact if things go wrong. That's what you hear a lot about that. We're gonna make sure that those things are in place we're never going to let the desire for speed get ahead of the desire for having a good way to control the pace and enable outcomes that we believe are the right ones to be going after great maybe just one more before I turn it open to questions for a minute you know one of the one of the technological challenges it feels like cyber threats just keep getting faster more sophisticated what are you doing to evolve your defenses and stay resilient as you're trying to grow the bank through us so so mid-year this past year, Fifth Third was given the opportunity to participate in Project Glasswing, which was a project kind of co-sponsored by Anthropic and by the U.S. government to really do research on cybersecurity and try to get ahead of the wave of what's really, I think, here now, as you guys have all probably seen in the last couple weeks. In that, we invested heavily into building cyber defenses for being able to scan code so we can find vulnerabilities and we can patch them ahead of things that are coming. So, for example, there was two big events a couple weeks ago that they were worried about the whole internet because 70% of the code was vulnerable. We didn't have that issue. We were modernized past that one. To the other one, we were able to patch that in like an hour. So what we built then was a muscle, both technically and operationally, to be able to get ourselves in a position where we can patch code very quickly. It's fairly automated at this point for us. But when things happen like a zero day, we went from a cycle that was a 30-day cycle, we're now getting that done in a day. A lot of that is giving us a chance to be on our front foot. The second thing we did as a part of that is we built a really good harness for scanning large code repositories that has given us a change to use that now repeatedly as we want to look and continuously scan code. And then to help our industry, we've all got to be, this is a place where we're going to have to work together. We ended up packaging that up and made it available for other banks to download, and we've had over 100 downloads of the harness to try to help get that out there for others. And so that's kind of where we're evolving from. The last thing I'd say is you've got to have your defenses ready. So we have been building agent capabilities to do observability in our own environment, detectability, so that, God forbid, should something ever happen, we can find it quickly and contain it. the last thing I'll say and this is a big piece of it and why I think we're able to move fairly quickly is we're not wasting time upgrading our legacy software we have for a number of years invest as I mentioned in our run and protect the bank investments to stay modern we don't have end of life in our in our technology stack a lot of a lot our peers right now I think are spending time getting caught up on that because I think some folks have fallen behind in that and that's going to be step one because if you're not on either current or within one version you're going to take longer to get those vendor patches because they're going to patch from newest to oldest and we want to make sure that we're in the front of those lines when we have to do that so those are those are the places that we've invested in and your lack of customization helps us accept those patches even faster correct yeah we don't customize so that that helps tremendously excellent why don't i turn it over and see if there are questions in the audience i see some right here we go with Mike to start there one easy one hard yes do I do I get the easy one describe Lucy as you mentioned the scaling the eye is easy scaling controls harnesses the governance is hard that's right and what you've done with the center we talked in the hallway completely understand the extent of what you're doing with Lucy. And I'll save my heart for Brian. Okay. Thank you. So as Mike mentioned, Lucy is the name that we gave to the harness that I mentioned and what that really is, if you're not familiar with a harness, it's the way you interact with these large language models like from Anthropic and from OpenAI and that is where you really build your guardrails or your rules for how that harness is going to work. And so we built this harness to really target large repositories of code. So Lucy is something that we have that can scan all of our internet facing code and it can do it in about a day, which is a pretty quick time to scan that much code. And then what it does is it does three things. It finds vulnerabilities that are exposed in software that wehave. Two, and this is really important, it will find vulnerabilities that can be chained together. If you think about the old world, if you had a vulnerability, you had one thing, you patched it and you had kind of ranked There's always high, medium, low. The low ones we didn't worry about a lot. Now you can, these models can chain lows together across your environment and create a high, right? And so it's a whole new way to think about it. Lucy finds those as well. And then it's also, I call it she, I think I did. Sorry, these AIs are getting pretty personal. But at the end of the day, then it is also putting to our engineers the patching so that it's producing the patch to go fix those. They can accept those in our software pipeline, and then we can patch it continue to move on so Lucy's become Really something that we're gonna run probably quarterly and then We've got smaller versions of it that we were running continuously for all of our engineers as their building code It's finding vulnerabilities up in the build cycles so that we can close them before they ever even get into production And then Brian the hard question who are you going to buy? The stock price is out before the BKX by a decent margin since the merger announcement. And that's the exception to the rule for a while there. And at this conference, we've had presenters going back in the 90s, the preferred consolidators, like Bank One. It worked till it didn't. Citigroup, believe it or not, it worked till didn't, Jake Morgan was a preferred buyer, and then, you know, U.S. Bancorp going back in time was a referred buyer till they weren't. PNC still today, you could argue, still a preferred and you're still a preferred buyer. So you at PNC are the preferred buyers out there. You have this better technology infrastructure. So how do you think about deals going forward in terms of timing and targets and what's the next America that seems like stock market-like? Thank you. Yeah, I think what all of that really means when you think of the terms preferred buyer is that investors trust us to make good decisions. They trust us with their capital. They trust to not destroy shareholder value. And we take that seriously. I think we've been pretty consistent for a couple years now, and it's the same thing we said prior to Comerica. For us, M&A is not a strategy. M&As are an accelerant of a strategy, and the things that we would consider, because you can't sit up in these positions and say you would never consider anything, because that's not in the best interest for your shareholders either. but it's got to make financial sense for our shareholders, and it has to accelerate the strategic objectives of the company. We're not going to be a company that's going to do deals to do deal. When we say what makes financial sense, it is in a world where we believe being able to generate and grow book value on a consistent basis over time, not diluting our shareholders, that requires a very long earn back. That is a core principle for us, and then it has to be worth it to us from a financial perspective in terms of whether it's earnings potential or growth potential over time for us to distract the company. Whether it's a big deal or a small deal, our tech and product teams basically had to take the last year off from doing the things to actually advance the bank from a core capability perspective because they had to focus on converting Comerica. They had to map existing product capabilities and figure out where we had gaps. They had do all of the data build work because Comerica's data ecosystem was meaningfully different than ours, and having to get their data in the shape necessary for their customers to be able to operate on our systems, there's a ton of work that was done in that. And we just are big believers that over the next five years, it is going to be way more important for us to continue to advance the technology and product capabilities of the company because that's how we, you know, when you think about like Muse might be a next question, and Tim touched on that on the earnings call, we want to have a value exchange with our customer that's based on something that is so much more than just price. So for us to keep advancing that capability and deliver more value for our customers, we have to be able to invest in ourselves. And I just don't think the acquisition of a small institution or one where you have to stretch on, that we're getting the right premium versus what we're able to do with investing on ourselves. We're confident in our ability to do these modular investments, earn high returns on capital for our shareholders, and to continue to deliver innovation over time. We think that's going to make a huge difference, and there's a real bar that that creates for us when we consider a deal. Comerica was a very, I think, unique and strong culture that had just incredible alignment with Fifth Third, the institutions that fit together better than I think we even imagined they could on the way in, and I just think for us it was a unicorn. It was a very special franchise that fit well and gave us a great opportunity. I just don't think there are a ton of those out there, and we're going to be very disciplined as we move forward and we think about transactions from here. Other questions? Yeah, right here. Thanks. Jude, I have a couple questions for you, and we don't always get to hear from that. So first, just there's been this sort of years long debate about sort of dollars versus percentage of tech spend, right? Like everybody is on a level playing field if you think about tech spend relative to revenues. But then like the universals, the absolute dollars are just enormous. So there's this sense that it's difficult for anyone to compete. So I guess I'd be curious to hear your thoughts. Like you made a pretty compelling argument as it relates to AI, you just don't have the same dollar limit per se, number one. The second question is just this notion of agents and stuff like MUSE, where do you stand in that conversation on allowing and identifying agents to come into the bank, sort of the liability questions, et cetera? That's a good question. So relative to tech spend at the bank I think if you look over the last five, six, seven years our tech budget has grown about 6% as a CAGR year over year. To your point, we don't, and I'm not, I don't think about anchoring it to, like, as a percentage of revenue. That's not a way we think about it. What we're trying to do, I think it's similar to, I guess, the way we're thinking about just investing in the bank and continuous growth, is making sure we understand the distribution of, like I talked earlier, of the tech spend is where we want it to be. So when we started three or four years ago, kind of segmenting my budget into, or the bank's budget, I shouldn't say it's not mine, But from, you know, protect and run and advance, we have targets that we want to hit in terms of the allocation across those. And so over the last three years, we've really tried to move it so that by really prior to Comerica now coming out of it, we want that advanced part of my budget to run somewhere between 45 and 50 percent of the overall spend. We want to keep, you knows, cyber around 15. Honestly, it'll probably be a little higher this next year as we're investing in some of the acceleration of our cyber capabilities and run is that continuous stay modern and don't let things fall behind. It makes up the difference in that. So the big thing for me is one of the benefits I think of having a guy like Brian in the CFO chair and Tim in the CEO chairs, we do this continuously. This isn't an episodic process for us to think about tech investment. And so we are already looking at planning it next year, and we have I think ideas probably within 10% to 15% of what we know it's going to be. what we're really working on now is what are the priorities of where we're going to take that investment and allocate it into those three buckets and what outcomes do we think we're going to get out of it and that's the way we're gonna continue to drive it i think it's a good way to think about also in this industry i mean it's one of the things i love about it we're going to set a plan now and probably by march it'll be half sideways because something will happen in the economy so we have to be fairly agile in the way that we think about what we'RE committed to so a lot of our ability inside the company is to have agility in what we are investing in so we're going to have modernization work that's just going to have to get done but a lot of the product work we're doing can can like modify and pivot throughout the year so that is we find more opportunities we can we can reallocate money as we need to throughout the year so. That's what we think about it that directly answers your question that's that's the way we think it. In terms of agents and news today we we we block news and other types of agents from coming in we don't want the direct Dorian for really three reasons. One, we need to sort out as an industry, honestly, liability first. When and if things go wrong, we've got to understand what the banks are responsible for, what the consumer is responsible for. I'd love to say what like Meta is responsible for but I don't find that getting a lot of traction. But that is stuff that needs to be sorted out, right? So that's one. The second thing is I do think we need some sort of control capability you call it know your agent like know your customer or whatever but I really have to be able to articulate back to I think our consumer that if you're gonna allow an agent to come in you're going to have to acknowledge and certify something with me and then I'm gonna have to be able track that as yours so I know it's yours coming in and out and I also have to have the cyber capability to know that somebody didn't get your credentials and hijack your muse agent and send it in on your behalf and I don't know it so there's controls that have to be in place before we're going to get comfortable, I think, with agents coming in and being able to transact inside of the core. And then there's some other ways around that. Like, even now today, Chad GPT has a partnership with Plaid, and they will screen scrape just like any other aggregator. We will allow that capability now. I think there'll be a point where you might allow read access to an agent and not write so that they can't move money, but they may be able to see things. Because we do want to be able, at some point, with the industry, be able to enable more of these capabilities. And I think we all have got to just make sure that we feel really confident that we can really put the footprint, the digital footprint on an agent like we can on you as a customer where we know the device you log in from. We know that it's you. We've got those authentication factors that can help us feel confident in those transactions. Manan. Hey, Manan Ghazali. I'm with Stanley. Jules, I guess the best way to protect against the risk that you mentioned from third-party agents is to have banks provide their own agenda AI tools to customers. So can you talk about, I suppose, what could be table stakes from what banks might provide to both retail and commercial clients, maybe two or three years down the line? And how do you think about that helping the stickiness of the customers from a first-mover advantage point? Yeah, I think there's two things. the from the consumer side you know i mentioned earlier that we're we're working on putting the agentic structure behind our chatbot genie by mid-year the real goal of that i think is over time to have our agent be able to operate on your behalf so you don't have to send a muse agent in right genie is already embedded into your consumer life as a customer if you think about our mobile app and we've already basically built the skills to have it replicate every capability that you can do in our app and so where we really see this going is that interaction is going to really evolve because instead of having to navigate 200 features in our mobile app you're going to be able to type or talk to genie and have it just do things for you have it pay your real estate pay your lawn lawn company pay send somebody zell that you need to send money to and have to do those types of things maybe even move money within your accounts right so that you can stay as profitable as a consumer as you possibly can be with the money you have with us and we want to see those things evolve as we enable that and you know that can go beyond working internally we i can see a day where your bank agent because you should trust it more than your meta agent can buy things on your behalf on amazon or out on whatever you choose to go buy things externally and it can become that trusted agent for you that's where i think this could evolve and that would create a lot of stickiness that we think is the experience we want our customers to have with us the last thing it does is it can actually add extra personalization because if i can get that agent to do those things for you you're still going to need to your bank at some point you're going to want to talk to somebody it could be for a mortgage it could me for something you're doing with your investments and equities and I think humans are still going want to know that they can stare somebody in the face and our goal is to have Jeannie when she can't do those thing get you to the person closest to you at the branch closest to use so you don't only have to talk to him you can just go see him and that's the stickiness that I think we're striving for achieving on the consumer side long term that i think is going to create an advantage for for banks that can do that um just to go quickly on the commercial side i think a better example and i'll go something a little different direction right we're already enabling um mcp which is basically a server that can interact with agents on our new line platform i think the stickiness in our payments business when you're when youre integrated technically in with companies and their erp systems for them to do receivables and payables and the way they measure uh you know manage your treasury management with us there's gonna be a way to enable agent agent interaction there that's going to be I think very beneficial for both the banks and companies in the future so you get away from your traditional maybe interface that you might use as a as a CFO or treasurer and now you're probably interacting with your agent that's working on top of Oracle SAP name your ERP system and it's can it can interact with fifth third in our agent through our new line platform to start to help or from a FinTech or if we that way to help those agents work together to help optimize your treasury management services you have with us from a managed service perspective, from a product perspective. And that's what we're already building towards in that space, because we think that's going to be a real early opportunity for us to really understand how agentic AI capabilities can work inside of our commercial bank space. I'm sure, yeah. maybe it's it's an extension of how we think about managed services today right what we're doing is we're actually putting ourselves in a position to solve operational problems so the trade-off when they think about signing up for these it's hard costs on their side it's not you know it's not traditional treasury management where you're just going in and trying to discount the bill you're actually helping them solve an issue where you know they're not they're going to be able to run more efficiently either from a payroll perspective or even third-party optimization perspective. And that has, when we talk about, you know, what are those different attachment points, like that has been the strategy around commercial payments. And we view that as the next natural extension of what that business should be. Brian, Jude, thank you so much for joining us today. I really appreciate it. Thank you.