Bank of America is allocating $4 billion this year to new technologies, including enhancements to its artificial intelligence tools for both clients and advisors, CEO Brian Moynihan announced on Tuesday.
In a call with analysts, Moynihan emphasized that AI has progressed from being a cost-saving measure to improving the quality of customer interactions. He highlighted the bank’s AI advisor and client insights tool, which has provided over six million insights to financial advisors this year.
Leading banks are heavily investing in AI by hiring talent, introducing AI-powered tools and assistants, and developing numerous use cases across their operations. Bank of America, the second-largest U.S. bank with $3.26 trillion in assets, dedicates $12 billion annually to technology, with a quarter of that allocated to new technology initiatives in 2024. The bank’s virtual assistant Erica reached 2 billion interactions in April, with clients engaging with it around two million times daily.
Despite ranking 15th in the Evident AI Index, which measures AI-preparedness among the largest global banks, Bank of America is behind competitors like JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup.
Bank of America exceeded Wall Street estimates in the second quarter, boosting its stock with optimistic guidance for the rest of the year. The bank’s net interest income (NII) was $13.7 billion, a 3% decrease from $13.83 billion in the second quarter of 2023. However, CFO Alastair Borthwick reassured investors that the second quarter represented an NII “trough” and raised the bank’s NII guidance to $14.5 billion for the year.
The bank’s stock rose 3.5% on Tuesday morning. Revenue for the quarter was $25.4 billion, up slightly from $25.2 billion the previous year, surpassing analysts’ estimates of $25.22 billion. Net income fell by nearly 7% to $6.9 billion from $7.4 billion a year earlier, but still exceeded Wall Street’s forecast of $6.41 billion.