Dive Brief:
- Tech spending yielded revenue-driving innovations for Bank of America in the first half of the year, according to Brian Moynihan, the bank’s chairman and CEO.
- The company posted $25.2 billion in revenue, an 11% year-over-year bump, in its Q2 2023 earnings statement, for the three-month period ending June 30. Net income grew 19% year over year, to $7.4 billion for the quarter.
- “Digital superiority is key to our operating dynamics,” Moynihan said during a Tuesday earnings call, highlighting greater customer retention and internal efficiency gains reaped from tech investments.
Dive Insight:
As organizations weigh the risks and potential rewards of emerging technologies, Bank of America has made steady progress and seen significant returns from its AI deployments.
The bank introduced the virtual financial assistant Erica in 2018 and has invested $3 billion or more annually in digital innovation for the last decade, Aditya Bhasin, the company’s chief technology and information officer, said in an October announcement marking the chatbot’s one billionth user session.
New technology spending grew alongside revenue through the second quarter. The company added $400 million in initiative investments to bring projected spending on innovation to $3.8 billion for the year, Moynihan said during June’s Bernstein Strategic Decisions Conference.
In 2022, the bank committed $3.4 billion to innovation initiatives, Moynihan said during a February financial services conference. The bank’s total tech spending tops $10 billion annually, inclusive of investments in new technologies like Erica.
“Investments made in technology have enabled us to grow industry-leading positions in digital tools, while enabling our clients to do great things, making us more efficient,” Moynihan said Tuesday.
Customer interactions with Erica rose 35% in the last year and surpassed 1.5 billion recently, said Moynihan. The company is now expanding its use of AI to client prospecting and advisor matching.
“Leave aside what’s in the future,” said Moynihan. “The way we've applied it so far has enabled our business bankers [to be] more efficient."
