Bank of America is allocating $4 billion toward new technologies this year, with significant investments in enhancing its artificial intelligence tools for both clients and advisors, CEO Brian Moynihan announced on Tuesday.
“AI has evolved from merely generating cost savings to significantly enhancing the quality of our customer interactions,” Moynihan explained in a call with analysts. He highlighted the bank’s AI advisor and client insights tool, which has already delivered over six million insights to financial advisors this year.
Leading banks are increasingly investing in AI, from recruiting skilled professionals to launching AI-driven tools and services, and developing diverse use cases across their operations.
As the second-largest U.S. bank with $3.26 trillion in assets, Bank of America spends $12 billion annually on technology, allocating a quarter of that budget to new technology initiatives in 2024. Its virtual assistant, Erica, reached two billion interactions in April, with clients engaging approximately two million times daily.
Despite these advancements, the bank ranks 15th in the Evident AI Index, which measures the AI-readiness of the world’s largest banks, trailing behind rivals such as JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup.
In other updates, Bank of America exceeded Wall Street’s expectations in the second quarter, boosting its stock with optimistic forecasts for the remainder of the year.
Due to its extensive consumer banking operations, Bank of America is more sensitive than its peers to net interest income (NII). The bank reported $13.7 billion in NII for the second quarter of 2023, a 3% decrease from $13.83 billion in the same period last year. However, CFO Alastair Borthwick assured investors that this was an “NII trough,” forecasting an increase to $14.5 billion for the year, anticipating higher NII levels for the rest of the year.
Bank of America’s stock rose 3.5% on Tuesday morning following the earnings report.
The company reported $25.4 billion in revenue for the quarter, a slight increase from $25.2 billion last year, surpassing analysts’ estimates of $25.22 billion as compiled by FactSet. However, net income fell nearly 7% to $6.9 billion from $7.4 billion the previous year, yet still exceeded Wall Street’s projection of $6.41 billion.