Dive Brief:
- Bank of America is using AI to build a competitive “moat,” relying on 270 AI and machine learning models across its business, Chairman and CEO Brian Moynihan said during the bank’s investor day last week.
- Moynihan said AI is already driving improvements behind the scenes, with most of the bank’s employees now accessing AI tools as part of daily work. The bank’s fraud loss rate was cut in half as a result of AI models that prevent and detect abnormal behavior. AI has also brought a 60% reduction in service call volume.
- “We see AI and other innovations as continuing to shape the future of financial services and the economy,” Moynihan told investors. “We plan and intend to continue to lead that.”
Dive Insight:
Financial services firms are not letting up on digital transformation and AI efforts. Quarter after quarter, banks are making progress toward broader business goals with the help of emerging technologies.
Some of the industry’s leading financial services companies spent significant time during their latest earnings reports discussing AI-fueled efficiencies, including Wells Fargo, JPMorgan Chase and Goldman Sachs. Exact use cases vary, but most banks are deploying the technology to level up customer experience, reduce risk and save costs.
AI agents are also gaining traction in the industry.
Citigroup and BNY are expanding access to the technology for their workforce. Bank of America is joining in, too.
“In software development, we have 18,000 developers at the company that use coding agents today to optimize our development process,” Hari Gopalkrishnan, chief technology and information officer at BofA, told investors. The executive had a long tenure at the company before taking his current role in July. Tracking AI project progress and identifying ROI are key parts of the strategy, he added.
“We’ve already seen 20% productivity [boosts] coming out of those parts of the lifecycle, which we are now reinvesting next year into new growth programs,” Gopalkrishnan said.
The number of technologists within financial firms working on agentic AI has grown more than tenfold, according to Evident Insights, which tracked the adoption ramp-up in the first half of the year.
As more banks pilot and deploy AI agents, governance is top of mind. Agentic AI brings a new set of considerations for enterprises to address, including infrastructure adjustments that allow data access across hybrid environments.
For highly-regulated industries, ensuring compliance amid change is critical — and especially challenging for global operations.
To keep pace with both the evolving AI regulatory landscape and the speed of innovation, organizations have to allocate the necessary resources to strengthening governance, according to Bernard Mensah, president of international for BofA, member of BofA’s executive management team and CEO of BofA’s largest international subsidiary Merrill Lynch International.
Business leaders are already working to fortify guardrails and oversight. Most enterprises plan to increase governance budgets as leaders spend more time managing risks than last year, according to a OneTrust survey.
“Our technology platform and those local rules and [regulations] mean that we need to be investing constantly to make sure that we’re compliant with whatever is asked for in each of these jurisdictions,” Mensah told investors.
