Dive Brief:
- Bank of America plans to invest $3.8 billion in technology initiatives next year, CEO Brian Moynihan said, speaking during a Q3 2023 earnings call Tuesday. The bank also spent $3.8 billion on innovation this year, less than one-third of its $12-billion overall IT budget.
- The innovation investments are paying off. Usage of the bank’s AI virtual assistant Erica jumped 16% in the last year, to nearly 19 million users, Moynihan said.
- North American banks hold a dominant position globally in AI innovation, according to an industrywide analysis by Evident, with Bank of America and Capital One as industry leaders. Together, the two banks own more than 70% of all AI patents filed by banking companies since 2010.
Dive Insight:
Bank of America was an early adopter of pre-ChatGPT AI and has seen its investments in the technology mature in the last five years.
Erica launched in 2018 and surpassed 1.5 billion user sessions in July. In September, the company leveraged the proprietary AI and ML technology behind the consumer-facing chatbot to enhance CashPro Chat, an interface for corporate and commercial clients.
“CashPro app sign-ins with our business clients are up more than 40%,” Moynihan said.
Banks in North America have been quick to commit to AI, according to Evident.
Wells Fargo led the investment charge from 2010 to 2023, with more than 150 AI-related deals, the report said. Last year, the bank launched its Fargo virtual assistant, a Google Cloud AI-based tool similar in function to Erica.
JPMorgan Chase is developing its own generative AI investment advisor and Goldman Sachs is testing a coding tool using the technology, according to CNBC reporting.
Bank of America is also looking to expand its AI portfolio beyond customer-facing applications to include employee assistants and coding tools, Moynihan said
“We’ve got a lot of inventors in this company,” Moynihan said.
The company’s inventor base surpassed 7,000 employees, according to an announcement last month, helping to grow the bank’s innovation portfolio to more than 6,100 active patents and applications.
While the internal tech teams will continue to build in-house solutions like Erica, Bank of America hasn’t ruled out commercially available products.
Selling AI capabilities to companies like Bank of America is big tech’s business model, Moynihan said. Rather than viewing the tech sector as competition, he said he sees it as a potential resource.