BofA Manages To Keep Expenses In Check By Going Digital — Now The Bank Is Using AI To Take It To 'Another Level'
Bank of America Corp (NYSE:BAC) shares got an earnings lift on Tuesday as the company posted better-than-expected quarterly results. CEO Brian Moynihan pointed to expense management as a big part of the bank’s recipe for success and suggested that it will only continue to improve with the help of AI.
What Happened: Tuesday on CNBC’s “Squawk On The Street,” Moynihan suggested the implementation of AI is beginning to show up in the company’s performance.
“This is not something you can do overnight,” Moynihan said.
BofA digitized financial services 20 years ago when it began deploying online and mobile banking capabilities. Today, a strong majority of its business is digital and the company continues to lean into the digital transformation with the latest AI technologies, Moynihan explained.
Operating expenses on a quarterly basis are still approximately where they were nearly a decade ago, despite all of the growth of BofA and the inflation that has taken hold in recent years, Moynihan said.
“That’s all through the implementation of digital capabilities,” he said. “What artificial intelligence does is take that to another level.”
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The BofA CEO highlighted the company’s AI-powered financial assistant called “Erica,” which now has more than 19 million users and is completing nearly 175 million interactions each quarter.
“Each one of those would have been a text or a phone call or an email and a direct response, and now it can answer the straightforward questions,” he said.
Moynihan told CNBC that the same technology being used to power the company’s natural language processing engine “Erica” can be applied to other areas of the business.
“We think there is great hope for AI on taking models that are built for specific purposes, applying them to our data, make sure they’re fed right, applying them on our premises so we make sure they are secure with our customers,” Moynihan said.
“Then we can use them to help us do tasks and take work away that teammates would rather not do and replace it with more work they’d rather do. And that’s what we’re up to.”
BofA beat analyst estimates on the top and bottom lines and guided for net interest income growth in the fourth quarter, which helped shares jump to 52-week highs on Tuesday.
BAC Price Action: Bank of America shares were up 5.65% at $44.28 at the time of publication Tuesday, according to Benzinga Pro.
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