Bank of America is allocating $4 billion towards new technologies this year, which includes enhancements to its artificial intelligence tools for both clients and advisors, CEO Brian Moynihan announced on Tuesday.
“AI has shifted from merely saving costs to significantly 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, noting it has provided over six million insights to financial advisors so far this year.
Major banks are heavily investing in AI, from hiring talented experts to introducing AI-powered tools and assistants, and embracing hundreds of new use cases across various business operations, with many more in development.
As the second-largest bank in the U.S. with $3.26 trillion in assets, Bank of America spends $12 billion annually on technology overall, dedicating a quarter of this amount to new technology initiatives in 2024. The bank’s virtual assistant, Erica, reached 2 billion interactions in April, with clients engaging with it about two million times daily.
Bank of America is ranked 15th in the Evident AI Index, which measures the AI preparedness of major banks worldwide, placing it behind competitors like JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup.
Bank of America reported strong second-quarter earnings, surpassing Wall Street estimates and boosting its stock on optimistic guidance for the rest of the year.
Due to its large consumer banking division, Bank of America is highly sensitive to net interest income (NII). The bank reported NII of $13.7 billion, a 3% decrease from $13.83 billion in the same quarter of 2023, before markets opened on Tuesday. CFO Alastair Borthwick assured investors that the second quarter represented an NII “trough.”
The bank increased its NII guidance to $14.5 billion for the year, anticipating rising NII levels for the remainder of the year.
On Tuesday morning, Bank of America’s stock rose by 3.5%.
The firm reported $25.4 billion in revenue, a slight increase from $25.2 billion in the same quarter last year, beating analysts’ estimates of $25.22 billion, according to FactSet.
Net income fell nearly 7% to $6.9 billion from $7.4 billion a year earlier, but still exceeded Wall Street’s projection of $6.41 billion.