BB&T Corp. said Tuesday it plans to spend up to $50 million to expand its presence in digital financial technology as part of a cost-cutting initiative.

Kelly King, its chairman and chief executive, said in October the bank is interested in acquiring a financial technology company to help accelerate its digital operations. Its main effort to date is its U by BB&T digital platform.

Analysts project BB&T is more likely to target smaller fintech groups that would help accelerate its digital platform rather than a fintech banking competitor.

“This sizable investment in financial technology companies represents an important strategic milestone in our digital business transformation,” King said in a statement.

“We’re excited about the possibility of new partnerships and innovative approaches to provide the best possible experience for our clients.”

Bennett Bradley, hired as chief digital officer in November 2015, is a member of the bank’s executive management team.

“(Bennett) is full-time focused on scouting the role, figuring out what the best fintech offerings are, looking for opportunities,” King said. “We are just completely open minded about how we can integrate the advanced techniques that fintech has brought to the world.”

Bradley said the investment signifies that BB&T is “on an aggressive pace to more quickly navigate our digital road map and further foster a culture of innovation throughout the company.”

“While an investment in fintech is just one component of our digital transformation, it’s a powerful way for us to gain greater access to new technologies and talent.”

Chris Marinac, managing principal with FIG Partners, said BB&T has emerged as an industry leader with digital banking. That represents a 180-degree turn from when BB&T was known for taking a toe-dipping approach to new technology and strategies.

“BB&T, even as a $220 billion bank, has become more nimble because it has realized how much costs it can take out of its system through digital,” Marinac said.

“It is laser focused on this effort, not waiting around for other banks to try it first.”

In April, King’s enthusiasm for plugging artificial intelligence and robotics into its back-office, customer service and compliance operations raised eyebrows with analysts and economists.

BB&T has joined Wells Fargo & Co. and other national and super-regional banks in spending hundreds of millions of dollars to pursue what they believe will be significant future cost savings from data mining of customer patterns.

“We will be pretty aggressive about that,” King said. “We just think there are huge ways to reduce cost in the backroom by the use of that.”

Forbes magazine called artificial intelligence’s potential for financial institutions “immense” because of its broad operational reach, such as: “including natural language processing (improving interactions between computers and human languages); machine learning (computer programs that can “learn” when exposed to new data); and expert systems (software programmed to provide advice) that help machines sense, comprehend and act in ways similar to the human brain.”

According to analysts, financial institutions have been slower adapters of AI and robotics.

Yet, research firm The Financial Brand said those companies are recognizing “the potential for cloud computing and machine learning algorithms, along with rising pressures brought by new competition, increased regulation and heightened consumer expectations.”

“They all have created a ‘perfect storm’ for the expanded use of artificial intelligence in financial services,” such as product delivery, risk management and marketing.

The drawbacks cited to AI and robotics are familiar ones when it comes to new technology, according to a survey conducted by Narrative Science in conjunction with the National Business Research Institute.

About 12 percent of participants said they hadn’t put AI to use because they felt it was too new, untested or weren’t sure about the security.

King said the bank plans to use the cost savings from AI and robotics to invest in digital products, new markets and “really keep a tight lid on the background expenses.”

“That’s why we’re optimistic in terms of longer-term operating leverage, because we will have to continue to invest in new technologies, etc., but at the same time we’ll simultaneously reduce on the cost our traditional process-oriented activities.

Tony Plath, a finance professor at UNC Charlotte, said most financial institutions have a research and development effort underway to reduce the human work force and replace it with some sort of automated delivery platform.

Plath acknowledges there will be significant repercussions for the economy as more bank and credit union employees are displaced from jobs by AI and robotics advances.

“Human labor is the most expensive, unreliable and mistake-prone element in any product or service delivery channel,” Plath said. “Take out the people and you get faster, better, more reliable, more consistent and cheaper products and services.”

Plath said BB&T is “simply grown too large, and its market share too significant in its core markets, to continue as an early follower.”

“Its newer, younger managers are more comfortable being innovators and early adopters when it comes to electronic delivery issues.”

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