What Banks Can Learn from BofA’s Multi-Billion Dollar AI Bet
By Steve Cocheo, Senior Executive Editor at The Financial Brand
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Erica, Bank of America’s virtual assistant introduced in 2018, is increasingly becoming the first, and sometimes only, tool that BofA customers need to get their financial chores done.
And Erica has moved from being just a retail banking aid to becoming an assistant to BofA’s business clients as well, dovetailing with the bank’s CashPro business app.
Moreover, Holly O’Neill, president of consumer, retail and preferred lines of business, says the two million daily consumer interactions with Erica save the bank the equivalent of 11,000 staffers’ daily work.
Need to Know:
- Erica now solves 98% of its customer inquiries without further human interaction.
- 60% of Erica interactions are now proactive, driven by Erica’s own outreach to customers.
- Meanwhile, the bank’s AI and machine learning patent portfolio has more than doubled since 2022. More than 270 AI and machine learning models are in production mode, serving needs all over the bank.
- In 2026, BofA will invest $13 billion in technology across every line of business. Spending on new capabilities has increased 44% in the last ten years.
How Erica Became a Full-Fledged Personal Banker
As Erica has developed, it has moved from being a beefed-up chatbot to a resolver of pain points, according to BofA officials. The system analyses what customers are asking about and connects to the rest of the bank’s digital architecture to eliminate friction.
“So, if you came in via Erica but you wanted to then talk to someone in the call center, you could seamlessly go there,” said Hari Gopalkrishnan, chief technology and information officer during a BofA investor day panel. No further authentication is required and the call center banker will know what brought the customer in.
Data insights based on past experiences drive proactive Erica-driven sales experiences.
Example: A preferred-level customer hasn’t signed up for the bank’s Preferred Rewards. Instead of just suggesting enrollment, Erica, with consent, will make it happen.
On the business side, Erica was incorporated into the CashPro app in August 2023, and it has already reduced live chat volume by 42%.
Read more:
Beyond Erica, AI Is Permeating BofA on All Fronts
Why It Matters: Jeff Busconi, head of wealth management strategy, products and services says, “This is really different from past cycles of innovation where the automation or the digitization was really focused on lower-cost high-volume areas like operations. Here, with AI, the opportunity is much broader. There are many more cost pools to go after, and we’re just getting started on those.”
Examples beyond Erica where BofA is building in AI:
• Hyperpersonalization in marketing, targeting better offers and more. “You can’t do it without AI,” said David Tyrie, chief marketing and digital officer.
• Software code generation and related tasks are being handled by 18,000 developers equipped with GitHub Copilot, upping productivity by 20%.
• Employees in Global Payments Solutions can now use AskGPS, an AI-powered virtual assistant. “We’ve combined thousands of vetted internal documents, so our associates have access to instant business intelligence,” said Mark Monaco, head of enterprise payments and head of global transaction business. More than 30,000 staff queries have been answered since its August debut.
• Even a decades-old function like optical character recognition can get an AI upgrade. “We’ve deployed a large language model to make OCR better,” said Scrivener. “It’s much more accurate. We’re getting much better data out of it.”
Read more: Is AI Learning the Job Faster Than Banks Can Redefine It?
Case Study: How BofA’s Marketing Simulator Improves Conversions
Tyrie said his staff took 30 AI models developed by Hari Gopalkrishnan’s people and created a marketing simulator.
“That simulator is designed to help us figure out the best ROI on a marketing dollar,” said Tyrie. “We can run our marketing operations more effectively and efficiently across the board.” This approach helps the bank “optimize its investment across message, product, channel and geography,” according to Tyrie.
The payoff: Tyrie said that conversion rates on marketing campaigns are running 60% higher.
Real-world impact: “We’re getting greater reach for the same amount of dollars that we’re spending out there,” said Tyrie. He added that the marketing team is saving thousands of man-hours in labor through the simulations.
Takeaway: Avoid Developing in a Vacuum
Even for a giant like BofA, adoption of AI and related technology must be in the context of what’s going on in the wider world.
Gopalkrishnan warns: “When you think about the future, the ability for our technology platform to better integrate with broader ecosystems, whether it be merchant ecosystems, financial ecosystems or even agent ecosystems is going to be critical for us.”
Read next: Blunt Advice from Wells’ CEO: It’s Time to Be Honest About AI and Headcount
