Bank of America is allocating $4 billion to new technologies this year, including improvements in its artificial intelligence tools for clients and advisors, CEO Brian Moynihan announced on Tuesday.
“AI has evolved from cost-saving measures to enhancing the quality of our customer interactions,” Moynihan said during a call with analysts. He highlighted the bank’s AI advisor and client insights tool, which has provided over six million insights to financial advisors this year.
Major banks are investing heavily in AI, from hiring talent to rolling out AI-powered tools and assistants, and developing numerous new applications across various business sectors.
Bank of America, the second-largest U.S. bank with $3.26 trillion in assets, spends $12 billion annually on technology, dedicating a quarter of that to new technology initiatives in 2024. The bank’s virtual assistant, Erica, had achieved 2 billion interactions by April, with clients engaging with it roughly two million times daily.
The bank ranks 15th in the Evident AI Index, which evaluates the AI-readiness of the world’s largest banks. This places it behind competitors such as JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup.
Strong Q2 Earnings Results
Bank of America exceeded Wall Street expectations in the second quarter, lifting its stock with optimistic projections for the rest of the year.
As the bank most affected by net interest income (NII) among its peers due to its extensive consumer banking operations, Bank of America reported an NII of $13.7 billion, a 3% decrease from $13.83 billion in the second quarter of 2023. However, CFO Alastair Borthwick assured investors that the second quarter represented an NII “trough.”
The bank raised its NII guidance to $14.5 billion for the year, expecting an upward trend for the remainder of the year.
Bank of America’s stock rose 3.5% on Tuesday morning.
The firm recorded $25.4 billion in revenue, a slight increase from $25.2 billion in the same quarter last year, surpassing analysts’ revenue estimates of $25.22 billion, according to FactSet data.
Despite a near 7% drop in net income to $6.9 billion from $7.4 billion a year earlier, profits exceeded Wall Street’s forecast of $6.41 billion.