Bank of America’s $3 billion in annual technology investments is paying off tidily, with the financial services firm reporting a huge $602 billion in payment approvals on its “CashPro” application over the past 12 months and its “Erica” chatbot surpassing one billion interactions as the “primary interaction method for our clients”.
Earlier this year Euromoney named BoA the world’s best bank for payments and treasury – a franchise “built around its CashPro platform” which manages liquidity, payments, receivables, trade finance and reporting.
Faiz Ahmed, Head of Global Transaction Services, noted at the time: “We are focused on creating straight through data. There are 20 to 40 data fields on each payment which all flow into our systems and have transformed treasury functions [many of which have] moved from being a cost center to generating revenue.”
BoA – one of the world’s largest financial services firms, which offers banking, investing, asset management and other financial and risk management products and services – reported its Q3 earnings this week and CEO Brian Moynihan told analysts that Bank of America tech spend would rise a further 15% over the coming year.
(BoA's Global Technology & Operations team spans a workforce of 95,000 people across 35 countries.)
Bank of America tech spend pays off as digital engagements surge
He said: “Erica surpassed 1 billion interactions since it was introduced four years ago this quarter. It has become a primary interaction method for our clients with more than 130 million interactions this quarter alone. When you look at our sales, 48% of third quarter sales were digital, a 36% year-over-year increase. This occurred even as we fully reopened our financial centers and had our teammates also selling…”
Bank of America has invested $3 billion or more on new technology initiatives each year for over a decade, including significant investments in AI that allow us to deliver a seamless user experience and industry-leading personalization for our clients banking online or on their mobile devices,” said Aditya Bhasin, Chief Technology & Information Officer. “Our continued investment in Erica’s AI-powered capabilities enables us to quickly respond to voice, text chat or on-screen interactions from clients who need assistance with financial transactions, and to proactively deliver personalized insights and advice at key moments.”
BoA reported revenues of $24.5 billion and net income of $7.1 billion for the quarter, and CEO Brian Moynihan struck an upbeat note on the call not just on the bank’s performance but on the economy more broadly.
He said: “A perspicacious analyst might wonder whether talk of inflation, recession and other factors would fructify in a slower spending growth. We just don't see here at Bank of America. Year-to-date spending of $3.1 trillion through September is up 12% compared to last year… It’s notable that isn't just inflation that is driving spending as transactions are up single digits year-over-year pretty consistently [including] continued growth in goods and services, particularly retail toward experiences of travel and entertainment. While fuel price volatility continues, it is not currently impacting the spend levels in this quarter as prices stabilize.”
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