Figuring out a bank's priorities is often as easy as following the money. Where is it spending? Where has it stopped spending?

At Fifth Third in Cincinnati, the path is pretty clear. The company is taking the capital that used to be tied to branches and reinvesting it in data analytics and improving its back-end systems with the hopes of being better at digital banking.

The $138.6 billion-asset company announced March 21 that it plans to hire 200 developers, engineers and others IT-related staffers by the end of the year, bringing its tech staff to more than 1,000 people. The company has already filled 80 of those positions.

As CEO Greg Carmichael "looks out on the industry, he sees an opportunity in technology to increase customer experience and efficiencies, while at the same time dealing with the deceleration of brick-and-mortar," said Sid Deloatch, Fifth Third's chief information officer. "That collates exactly where we want to go in terms of the growth in technology. We want to be able to do dynamic offerings through the consumer side with an omnichannel perspective. It's all about recognizing and trying to be transparent about who are our most profitable customers."

It's also about recognizing trends within its customer base. From 2014 to 2015 the share of the bank's customers using its mobile banking app increased 28%. During that same period, the number of customers interacting with the bank only via mobile applications increased 58%. Digital-only customers account for between 5% and 10%, while more than 80% customers rely on multiple channels, Fifth Third's chief financial officer Tayfun Tuzun, said late last year. He added that 10-15% of customers rely strictly on the branches but that the company expects the percentage to decline over time.

Besides looking for ways to improve its digital channels from a user's perspective, the new staffers will spend their days looking for ways to make the back end work better. Although the company is focused on digital banking, that could also mean finding ways to make the technology at the branches better, too. For instance, it is working to improve the in-branch, teller-based check processing service so that it can implement real-time deposit recognition like it already does with mobile check captures, Deloatch said.

Also, the company is looking to improve the way it collects and uses data. That should help the bank in "solving faster credit decisioning, identifying customer profitability and making next best offers which will be done real-time over digital channels," Deloatch said.

Observers say it is a smart move for the company.

"Survival really depends on personalizing digital banking," said Mark Schwanhausser, director of omnichannel financial services at Javelin Strategy & Research. "So the point here about big data is that it is an immediate need."

In short, the more a bank knows about a customer, the more it can tailor its offerings to their needs. And with digital banking eroding the number of face-to-face interactions, these insights can help prevent a situation where a customer leaves or gets other products from a different bank.

In the past year Fifth Third has shed 105 branches, roughly 8% of its total network. The savings gained by those sales and closings are helping to bankroll the tech investment. Fifth Third has said that more than 100 of the new positions it is hiring for will come with salary packages totaling more than $100,000 each.

"It's a redeployment in my mind that recognizes the fundamental shift to mobile first," Schwanhausser said.

In that regard, Fifth Third finds itself in good company – bank executives are under tremendous pressure to cut costs, but many are adamant that they don't want to sacrifice innovation for the sake of operational efficiencies.

And luckily for Fifth Third's management, its investors have not experienced much sticker shock.

"These are investments that banks don't have a choice in making," said Scott Siefers, an analyst at Sandler O'Neill.

Fifth Third's investors also likely take comfort in the fact that it has a real competitive advantage in its new chief executive, who brings a tech-minded focus to the company's operations. Carmichael has previously been the bank's chief information officer, and he has made it clear that technology would become a priority while he is at the helm.

"This is an industry going through so much technological change, so if you can have a leg up that's helpful," Siefers said, adding that investors also won't judge Carmichael "solely on how good the bank's mobile offering is."

But Carmichael’s experience doesn't just help the bank's standing in investors' minds – it also provides Fifth Third with clout when attempting to recruit the best in tech. Current and prospective employees enjoy knowing that one of their own rose through the ranks to become CEO, Deloatch explained.

"It's a great discussion point as we go into recruiting environments to tell the story about how Fifth Third is becoming a technology company," Deloatch said.

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