- Fifth Third is modernizing its legacy core with a shift to the cloud via FIS.
- The migration of the deposit and wealth management systems will begin in the fourth quarter.
- The new tech is set to shake up the bank’s tech org and the way it operates.
Cincinnati-based Fifth Third Bank announced Tuesday it will expand its partnership with financial tech giant FIS to migrate its core deposit-banking and wealth-management systems onto the cloud.
Fifth Third counts more than $160 billion in deposits — ranked 14th nationwide — and about $464 billion in assets under care, of which $58 billion is managed under its trust and RIA business. All of it sits on systems built internally.
Now, the regional bank will shift everything to FIS’ modern core, which is based in the cloud.
The journey to transform Fifth Third’s core banking systems will begin in the fourth quarter and last about three years, Chief Information Officer Jude Schramm told Insider. The bank is taking a phased approach to the migration, with certificates of deposit and IRAs slated to shift in about 15 months, he added.
Before that, the bank will spend time preparing employees for operational and process changes.
“This isn’t a pure technology play,” Schramm said, who added there’s a big emphasis on mapping out how processes run, teams are organized around them, and the tech that supports them.
“This progression isn’t just ‘swap out technology A, put in technology B.’ This is going to affect people’s jobs and the way the organization works,” he added.
Banks are moving deposit systems to the cloud
In April, Insider reported that JPMorgan Chase, with $2.2 trillion in customer deposits, is also looking to overhaul its deposit system to one based in the cloud and is hiring engineers at its sprawling Columbus, Ohio, regional hub.
Fifth Third isn’t the first migration for FIS since it started building the tech six years ago. MUFG subsidiary Union Bank and BMO Harris are among the 11 banks that have announced plans to adopt FIS’ modern core, Rob Lee, FIS head of banking and digital, told Insider.
The migration to FIS’ cloud-based core is part of a larger tech overhaul at Fifth Third. Cloud-based fintech nCino is launching Fifth Third’s revamped commercial loan origination system in August. The bank is already working with AWS, and has added 200 cloud engineers in the past year, Schramm said, with plans to hire more.
Fifth Third’s work with FIS for the Paycheck Protection Program in 2020 served as a proof point for how quickly the tech giant could work, Lee said.
The bank is aiming to react faster to changing market trends and regulations, and speed its time to market, Schramm said. The product development cycle will shrink from roughly eight months to as little as one, he added.
The project begins as the midwestern-based Fifth Third also sets its sights on a fast-growing retail market: the southeast. The bank has opened 32 branches of a planned 120, American Banker reported in April.
“This gives us a chance to look at how we deploy to those markets faster,” Schramm said.
Fifth Third has also grown out its digital ecosystem. In June, it acquired Provide, a fintech that digitizes healthcare services. And in April, it launched Fifth Third Momentum Banking, which offers two-day early payday, no monthly maintenance fee, and savings goals features.
As it brings on new tech, the bank is consolidating and depreciating legacy stacks, Schramm said. The bank currently runs 1,000 legacy applications, of which about 75% are in the consumer bank. Fifth Third is looking to cut that by as much as 30% as part of the migration, Schramm said.
“It’s a lot more expensive to run legacy architecture in the cloud, if you don’t do it right,” he added.
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