Regions Financial Corp at Citi FinTech Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : So first, maybe Dan and Paul, can you provide an overview of Regions' core modernization efforts and highlight what is involved and also give us a status update on where you currently stand with respect to completing the various milestones within the project? C. Dandridge Massey - Regions Financial Corp - Senior Executive Vice President, Chief Enterprise Operations and Technology Officer of registrant and Regions Bank Sure. I'll get started and then, Paul (inaudible). But we're probably 2.5 or so years into our core modernization effort, predominantly covers two core systems: commercial loan servicing and our core deposit system. I will say that our modernization goes well beyond those core platforms themselves. We are essentially rebuilding our API layer, this layer that helps all of our systems talk to each other. We've been making corresponding investments in digital channels. We have a new mobile app that we developed in-house that just rolled out this summer. We've been investing pretty extensively in authentication capabilities, which helps reduce fraud, reduce customer friction, and enable growth. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 19, 2025 / 6:30PM, RF.N - Regions Financial Corp at Citi FinTech Conference And we've made substantial investments in our data governance, data management, a real-time data store in the cloud. And that is a really good fuel for a number of AI products, both in terms of traditional AI that are well deployed that Manav can speak to and early stages of deploying generative AI and patterns across the enterprise. So pretty extensive set of transformation activities that really cover every level of the tech stack, all business units, all channels. And I'll let Paul add to this and talk a little bit about the current timing and scheduling.

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : Dan, I was pressing you a little bit earlier in terms of what we're going to get in terms of benefits. We've seen all the work behind it to get these core modernization upgrades. But, ultimately, how is it going to allow you to better serve some of your customers? And maybe you can dig into the example you gave me about small business acquisition. C. Dandridge Massey - Regions Financial Corp - Senior Executive Vice President, Chief Enterprise Operations and Technology Officer of registrant and Regions Bank Yeah. So there are a number of benefits. I mean, a lot of banks in certain regions are currently on 30-, 40-year-old legacy COBOL mainframe deposit systems; very, very cumbersome to modify, to maintain; aging workforce. Folks aren't coming out of school wanting to go with COBOL. So this transformation is going to help us get to a modern cloud-based core, a real-time core, which unlocks a lot of creative possibilities around how to bring new products and services to our customers across the bank. It is something that will help support our business unit strategies. All of this is underpinning our business strategies, which is critical because it doesn't matter what kind of technology you put in place. If it isn't applied against your business strategy, you're not going to get the outcomes. With the new technology, the API layer, and as we've started to implement more modern ways of working, we'll be able to be much more nimble as we go to market and be able to respond to customer needs much more quickly. Now while we're working on the testing and pilot and deployment of the new core itself, we have built this enterprise API layer that, again, allows systems to talk to each other more easily. We're actually going to be able to start getting value from that next year, ahead of the core deposit version. The example Keith and I were talking about is that through our strat-planning process, both our Commercial Bank and Consumer Bank targeted that we want to grow small business relationships, both in terms of deposits and lending. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 19, 2025 / 6:30PM, RF.N - Regions Financial Corp at Citi FinTech Conference Today, for example, in the Consumer context, we cannot go outside of a bank branch to originate a small business account. We have a bank branch platform that is hardwired into the old legacy deposit system. And that's not conducive for walking outside of branch. By using the new API layer, we're able to build a digital front end using the new APIs. This API will be able to traffic between the old core and the new core so that we can we do the customer migration. So we're putting that in production. We're going to use that to create a capability where one platform can be used by either commercial RMs or bank branch associates to go out of the branch, meet with small business owners, open a deposit account; later in the year, open a lending account. And if we desire, that small business customer could go direct digitally. It's all one platform. It's modern architecture, cloud-based. And that's a really good example of how we're going to start to drive benefit, even ahead of the core platform.

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : That's terrific. So there's a lot of benefits. But then there's also some risks, right, in terms of risk management? Can you talk about the approach you've taken to ensure the safe and effective use of AI? And also, maybe from a risk management perspective, outside parties using AI, how much of [an impact] is that? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 19, 2025 / 6:30PM, RF.N - Regions Financial Corp at Citi FinTech Conference

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : Just a follow-up on that. Obviously, the quality of your data is going to determine how much you're going to get in terms of AI. So it's all about the data infrastructure. Can you talk about maybe how you can benchmark yourself versus peers? And maybe give us an idea of some of the key questions people should be asking to be able to differentiate where banks are in terms of data infrastructure?

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : That's great. Yeah. So let's talk about payments. Maybe you can share with us how Regions is positioning itself with respect to the potential disruption you see or perhaps expect to see in the payment space. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 19, 2025 / 6:30PM, RF.N - Regions Financial Corp at Citi FinTech Conference C. Dandridge Massey - Regions Financial Corp - Senior Executive Vice President, Chief Enterprise Operations and Technology Officer of registrant and Regions Bank Yeah. It's a good question, Keith. So we look at the disruption that's happening in the payment space. One of the observations that we have is that the disruption that you're seeing generally from individual players is focused on single-use case, right? And so a lot of it you see on the consumer side within [P2P]. Some of what you've seen on the business side may involve some B2B disruption -- B2B payment disruption. What we're doing is we're really leaning into our full-service payments franchise, if you will. So we offer a full range of payment services, from legacy payment offerings, things like Lockbox and integrated payables, all the way out to offering instant payments capabilities. We were one of the early adopters of RTP from an ACH perspective. We're one of the top 10 banks in the country in terms of ACH origination capabilities. We were one of the first banks to roll out Commercial Mobile Pay, which is a card innovation offered through Visa. We think, Keith, that by leaning into those payment capabilities that we already offer, married up with our other products that we offer, from a deposit perspective, from a lending perspective, we're providing really a full suite of services that support the relationship. So yes, could our customers and clients go to some of these disruptors to get one-off payment capabilities? Sure, they could. But we believe that the real strength is in that full relationship.

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : You [sit] on The Clearing House, right? So when you talk about tokenized deposits, one of the key issues to solve is interoperability. Maybe just highlight some of the issues you guys talked about. C. Dandridge Massey - Regions Financial Corp - Senior Executive Vice President, Chief Enterprise Operations and Technology Officer of registrant and Regions Bank Yeah. So with tokenized deposits, in theory, you could have 8,000 financial institutions that starts tokenizing their deposits. The challenge is going to be how do we solve for that interoperability conundrum. We are an owner of The Clearing House. The Clearing House as an industry utility has really brought together its ownership to talk about what are models that could be used to support interoperability, clearing, and settlement between financial institution. Our position is that it's probably going to take that utility approach at an industry level in order to solve for the challenges around interoperability. I think the other piece that I do want to call out is that even within financial institutions individually, as they think about being able to support tokenized deposits, it's about adapting their infrastructure to be able to meet those technology needs. As we made investments in our migration to our new core, Temenos, one of the elements of that investment is that it can support, if we decide to move in the direction of stablecoin or move forward with tokenized deposit, we've got the infrastructure that can support us in that. So we think our engagement with The Clearing House in terms of building out the interoperability layer and then the investments we made within our own infrastructure, we think, positions us to be able to address trends within the market.

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : That's great. Paul, I want to come back to you. So a lot of your peers have been modernizing their apps around the core and moving to the cloud. But there's probably only one other large regional bank that has taken on a true core modernization effort. That took a lot longer than expected. So why are you so confident that this is the right move?

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : Right. And I think when you look at internationally, it's been a lot more common to see banks replacing the core in Europe, as well as some banks such as Nubank and DBS. So why haven't we seen this in the US?

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : And then let's say you're able to naturally snap your fingers and all of a sudden, everything is finally converted to the core. How does that tie in the strategy? Like, is it enough just to have the technology, or how does the strategy play into it as well? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 19, 2025 / 6:30PM, RF.N - Regions Financial Corp at Citi FinTech Conference C. Dandridge Massey - Regions Financial Corp - Senior Executive Vice President, Chief Enterprise Operations and Technology Officer of registrant and Regions Bank (multiple speakers) But I think it's really important to align the fact that just putting a new technology on a (technical difficulty) business strategy. So one of the great things about Regions -- and I've worked with a number of larger banks and love the fact that Regions is laser-focused on strategy on the customer, really disciplined around how we execute on that. So everything we're doing is in service of the business strategy. The small business example that I gave you earlier was a great example (technical difficulty) planning cycle. Commercial Bank identified that as a growth segment. Consumer Bank identified that as a growth segment. A lot of banks would often do that independently. We came together as a team and created one focused solution that we can use for associates or customers, single platform, optimized investment. That type of discipline aligned with the business unit strategy is how you get to benefit from these new (inaudible). A really fundamental part, Tim talked a little bit about how some of the fintechs will go after rifle-shot elements, right? They're looking for the [intersection of friction and margin] and trying to make off a piece. We want to bank the entire client. When we talk about commercial banking, we want -- yes, we want lending but we want to [operate the account]. In the consumer basis, I may have mentioned we have our direct deposits, which we just implemented. We allow people to bring direct deposits in when they open an account. That's because we want it to be a primary high-quality checking account. That then turns into a really rich set of data from the new core that goes into our customer DNA data layer in the cloud, where we can then feed AI engines to provide enhanced guidance, insights, whether it's a Commercial, Corporate customer, Small Business, Wealth, or Consumer. But all of that means that the technology is in service of business strategy. Our business units do a great job of being clear on who their target segments are, what are the needs of those client segments, what capabilities do we need to deliver to them to serve those needs. And then we come together as a consultative technology team to use all the [same] technology to deliver those capabilities. And that's what we're going to continue to do. Ultimately, the value from the core isn't just putting in. It's doing all of those things.

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : Okay. One thing that's changed over the recent years is that a lot of regional banks trade at a discount to the very large banks. And there's a lot of concern about potential disruption risk because you're at a huge disadvantage to the trillionaire banks with very large budget. So how can we, from the outside, benchmark your capabilities across tech, data, and payments for some of these larger institutions? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 19, 2025 / 6:30PM, RF.N - Regions Financial Corp at Citi FinTech Conference C. Dandridge Massey - Regions Financial Corp - Senior Executive Vice President, Chief Enterprise Operations and Technology Officer of registrant and Regions Bank Yeah. I'll start and feel free to jump in. The first thing we have to do is make sure we're trying to get as close to an apples-to-apples comparison. If you look at the G7 banks (inaudible) the tech budget purchase, they're a global bank. They have multitude of businesses. We have a different business profile, right? We're largely US-based. We don't have, necessarily, all the businesses that they did. The only thing I would tell you from being larger organizations, the example that I gave on small business. A lot of these bigger companies, they really don't even talk to each other internally. They would just simply go build two or three of the same thing. They'll buy duplicate services. They will test and learn on things that we don't feel the need to do. And really, there's a good bit of waste in some of those numbers. So I think that we have plenty of investment capacity. By the way, we are being good stewards of that. We are actively looking at ways to optimize our processes. We do process mapping, process engineering, automation. We've migrated from paper to digital statements to reduce postage and printing. We've already, in the last 2.5 years or so, taken out, within the tech and ops space specifically, $70 million in annual recurring run rate expense. And that number, if you forecast in a year or two, will be over $100 million. And we're reinvesting that in fraud prevention capabilities, cyber capabilities, authentication, core transformations. So we are -- we stay very tight to the business strategy. We're going towards modern architecture and technology. We are moving to Software-as-a-Service wherever we can to keep systems current and not get back into a tech debt situation. And by being really disciplined like that, I feel highly confident that we have been and will continue to even more strongly compete with the larger banks.

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : Now same topic. With AI, you think about it, that's cutting edge and types of things moving really quickly. You would think that the largest banks are going to really benefit a lot from this from the size of their budget. So as you look at some of your peers in terms of where they're focused on AI, do you see a lot of differentiation from the AI strategies? And over the next three years, is this going to lead to a difference in terms of capability for banks?

Question: Keith Horowitz - Citi Infrastructure Investments LLC - Analyst : Okay. Dan, just to wrap it up, any final thoughts on your end in terms of message you want to get across? C. Dandridge Massey - Regions Financial Corp - Senior Executive Vice President, Chief Enterprise Operations and Technology Officer of registrant and Regions Bank No. I would just say we're really excited about the progress that we've been able to make over the last three years or so. And in the case of data, I'd say it goes even further back than that. But we are making a combination of these foundational investments. We're confident in our core conversion schedule that we have ahead of us. We're modernizing through that entire tech stack, all the way to the associate experience and the customer experience. We're doing it in a disciplined manner. We're going to work as we have to self-fund that activity. So we're being good stewards. And I think we're just going to continue to see value as we execute against the business strategy. So part of what we hope folks take away from today is Regions as a Southeast bank, maybe not think tech-forward as the first thing, but we're seeking to shift that narrative. We are leaning into tech. We are being innovative. We have incredible talent, particularly -- that we've picked up in the last several years. And we've got a really strong agenda with tight alignment to a really strong business strategy. So we're excited about the future.