Bank of America is allocating $4 billion this year toward new technologies, including enhancements to its artificial intelligence tools for both clients and advisors, according to CEO Brian Moynihan.
“AI has moved from cost-saving ideas 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 more than six million insights to financial advisors so far this year.
Major banks are heavily investing in AI, hiring talent, introducing AI-powered tools and assistants, and developing hundreds of new use cases across their businesses. Bank of America, the second-largest U.S. bank with $3.26 trillion in assets, spends $12 billion annually on technology, allocating a quarter of that budget to new technology initiatives in 2024. The bank’s virtual assistant, Erica, reached 2 billion interactions in April, with daily engagements from clients nearing two million.
The bank ranks 15th in the Evident AI Index, which assesses the AI readiness of the world’s biggest banks, trailing behind competitors such as JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup.
In other news, Bank of America exceeded Wall Street estimates for the second quarter, resulting in a rise in its stock on optimistic guidance for the remainder of the year.
The bank, which has a significant consumer banking business, is highly sensitive to net interest income (NII). Its NII was $13.7 billion, a 3% decrease from $13.83 billion in the second quarter of 2023. However, CFO Alastair Borthwick reassured investors during the earnings call that the second quarter represented an NII “trough.”
The bank raised its NII guidance to $14.5 billion for the year, anticipating that NII levels will increase for the rest of the year.
Bank of America stock rose 3.5% on Tuesday morning.
The firm reported $25.4 billion in revenue for the quarter, up slightly from $25.2 billion the previous year, surpassing analysts’ revenue estimates of $25.22 billion. Net income fell nearly 7% to $6.9 billion from $7.4 billion a year earlier, but profits still exceeded Wall Street’s projected $6.41 billion.