Brian Moynihan, CEO of Bank of America (BofA), in his earnings report for the first quarter of this year, said that each business segment showed good results during this period, as the financial giant quickly and organically developed customer relationships and accounts.
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Representatives of the bank informed investors that the positive results of the financial institution’s activities are largely the consequence of the integration of digital tools and solutions. They also noted that the digital transformation of the banking ecosystem is a process of gradual change of functions.
Experts report that according to the results of the first quarter of 2023, many financial giants have demonstrated performance results that exceeded initial expectations. These indicators are observed during a period that is difficult both for the banking sector and for the economy as a whole.
CFO Alastair Borthwick said that BofA is currently in a state of stress test, but at the same time does not plan to abandon compliance with the principles that support the growth of the customer base. The number of consumers is growing and their loyalty is also showing improvement. This result is provided by a growing set of digital tools and platforms.
In a report for the first quarter of 2023, the bank reported a 35 percent increase in the use of its intelligent virtual and voice assistant with artificial intelligence Erica. The financial institution also recorded that 73% of households actively use digital platforms.
BofA’s consumer banking segment increased digital sales by 4% year-on-year. Sales in this category accounted for 51% of the total volume. Active mobile banking users continued to grow steadily from 35.5 million in the last quarter of 2022 to 36.3 million in the first quarter of this year.
BofA reports that the number of digital technology users on all consumer platforms and in relationships with banks has grown from 54 million a year ago to 56 million. The use of digital channels and digital sales showed similar growth during the previous four fiscal years.
The volume of Zelle’s P2P payments has grown to 275 million transactions compared to 213 million a year ago.
The number of interactions using Erica’s virtual assistant on all consumer platforms increased to 17.8 million from 14.2 million a year ago and 5.3 million in the first quarter of 2020. The benefits of a digital assistant are not new functionality.
The financial institution intends to use artificial intelligence and any synergy with Erica, but such solutions will not be implemented in the short term. Representatives of the bank noted the significant value of the capabilities of AI, but its active use is possible provided that concerns about bias and reliability of information sources are neutralized. It is important for a financial institution to know the principle of artificial intelligence decision-making and to be sure that advanced technologies with independent action comply with the regulatory framework.
Erica and other internal artificial intelligence tools use a special predictive language program. Models and solutions are dependent on internal data and allow you to quickly get information in real-time.
In anticipation of an increase in interest rates and a reduction in lending volumes, BofA informed investors about the strengthening of reserves in case of default on loans. The financial institution increased the reserve amount from $901 million to $931 million. Brian Moynihan said that in the bank’s priority system, the interests of customers who want stability in these difficult times are in the first place.
As we have reported earlier, Bank of America Sees Slowing Credit and Debit Card Spend.
