Bank of America will invest about $75 million per quarter in technology from now through the rest of 2019, the bank reported in its earnings call today.
In its Q2 earnings call today, Brian Moynihan, chairman and CEO at BofA, said:
…We continued to invest in our businesses and began an additional $500 million technology investment, which we intend to spend over the next several quarters, due to the benefits we received from tax reform. Even while making investments in people, technology, new markets and real estate, we managed to lower expenses again this period.
On the earnings call, Bank of America reported 35.7 million digital users in this quarter ended on June 30. Of this number, 25.3 million are mobile users. In the same quarter last year, BofA’s mobile users were at 22.9, only a 10.4% YOY increase in the bank’s mobile users.
But for Bank of America, digital banking continues to be important, especially on the consumer side where the P2P app Zelle, the bank’s digital auto loans, and digital mortgage initiatives continue to show potential in driving sales and customer acquisition.
This quarter, the bank attributed 24% of sales to its digital channels. Last month, Dean Athanasia, president of consumer & small business at BofA, said his goal for the bank was to drive that number up to 50% over the next 18 months. Hence the $500 million investment in technology. Part of this effort consists of adding new features and offerings to increase digital engagement among its existing customers.
The bank has been doing just that — most recently, the bank completed rolling out its AI-driven chatbot Erica in June. Bank of America currently has 2 million Erica users, according to today’s call. Erica was launched in March. The chatbot can perform transactions like checking balance, bill pay and transfers, among other things. BofA will continue to add features to Erica, the company said today. Prior to that, in April, BofA launched its digital mortgage platform, allowing users to complete a mortgage application on the bank’s mobile app.
In the call today, BofA reported that its mobile usage, defined by the bank as the total number of application logins using a smartphone or tablet, increased about 30% YOY. And its P2P service Zelle saw a 50% YOY growth in volume to $10 billion. Digital banking also represents a high amount of consumer deposits for Bank of America. This quarter, the bank reported that 65% of its deposits come from digital channels (mobile and ATMs).
During this quarter, Bank of America reported a net income of $6.8 billion compared to $5.1 billion in the same quarter last year.
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