In earnings calls for publicly traded banks in January, analysts had plenty of questions for CFOs about the deployment of artificial intelligence tools, but they had even more inquiries about the reliability of revenue growth.
That’s according to an analysis of such calls conducted by PwC and released last month. The analysis, which the company has dubbed “Banking CFO Insights,” is a new endeavor for the Big Four firm, said Dan Goerlich, PwC’s U.S. banking and capital markets deals leader, in an interview.
He described the analysis as a “new thought channel” that’s intended to capture the banking industry’s “complexities and paradigms that might not exist for a traditional CFO.”
Across a sampling of earnings calls for publicly traded banks in January, PwC found that 30% of analyst questions centered on “quality and resilience of revenue growth,” according to the report.
“These questions focused on the reliability of revenue growth — where it’s coming from, how dependent it is on pricing versus volume, and whether it’s supported by mix and client behavior that can hold up across cycles,” the report stated. “The emphasis was on executive confidence and resilience of the outlook, not short-term acceleration.”
One-quarter of questions pertained to “expense flexibility and operating leverage,” while just 15% were about AI investment and execution, according to the report.
And, counter to the ceaseless stream of buzz around the nascent technology, banks appear to be more focused on “deeper technology platform upgrades,” for now, the report stated. This includes upgrades to things like the general ledger, data architecture or enterprise systems like ERPs.
“These large, multi-year investments are reshaping reporting, controls, and operating models. CFOs should enable these modernization efforts to translate into measurable ROI and durable efficiency gains,” the report said.
PwC declined to share how many how many earnings calls the firm analyzed.
While PwC’s report identified a relatively small percentage of analyst questions related to AI in the first quarter, Goerlich expects that figure to grow “exponentially” in the quarters and years ahead.
“I think that’s going to be table stakes, and just a matter of when, not if,” Goerlich said about AI-related investments at banks. Goerlich suggested that analysts may not yet know the “exact questions to ask” about AI-related ventures, but that is likely to change.
That could one day lead to “more pointed questions” about promised efficiency ratios, for example, he said.
Meanwhile, PwC’s report pointed to a looser regulatory framework for banks in the second Trump administration. To wit, the report pointed to S&P Global Market Intelligence data showing that the median timeline from announcing a deal to closing it shrank to 148 days for two dozen transactions last year involving banks with $1 billion to $25 billion in total assets. That compares to 227 days for the same type of deals under the Biden administration.
Looser regulations, generally, may give CFOs “more of an appetite to take on initiatives” in the future. It’s likely they’re “not worried about having to change course due to a new rule being laid out,” Goerlich said.
