Bank of America is allocating $4 billion towards new technologies this year, which includes upgrades to its artificial intelligence tools for both clients and advisors, CEO Brian Moynihan announced on Tuesday.
“AI has transitioned 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 financial advisors with over six million insights so far this year.
Major banks are investing heavily in AI, from hiring talent to rolling out AI-powered tools and assistants, with numerous new applications in development across their various businesses.
Bank of America, the second-largest bank in the U.S. with $3.26 trillion in assets, spends $12 billion annually on technology overall, dedicating a quarter of that to a range of new technology initiatives in 2024. The bank’s virtual assistant, Erica, reached two billion interactions in April, with clients engaging with it about two million times daily.
The bank ranks 15th in the Evident AI Index, which evaluates the AI-preparedness 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 surpassed Wall Street estimates in the second quarter, boosting its stock on positive guidance for the remainder of the year.
Due to its significant consumer banking business, Bank of America is the most sensitive among its peers to net interest income (NII). The bank reported NII of $13.7 billion, a 3% decrease from $13.83 billion in the second quarter of 2023. However, CFO Alastair Borthwick assured investors during Tuesday’s earnings call that the second quarter represented an NII “trough.”
The bank has raised its guidance on NII to $14.5 billion for the year, expecting NII levels to rise for the rest of the year.
Bank of America stock increased by 3.5% on Tuesday morning.
The firm recorded $25.4 billion in revenue, a slight rise from $25.2 billion during the same period last year, surpassing analysts’ revenue estimates of $25.22 billion, according to FactSet data.
Net income, however, declined by nearly 7% to $6.9 billion from $7.4 billion a year earlier. Despite the decrease, profits exceeded Wall Street’s forecast of $6.41 billion.