Bank of America (BofA), one of the largest banks in the United States, is intensifying its digital transformation efforts by investing in artificial intelligence (AI) and blockchain technologies, as outlined in its latest report.
The report provides insights into the bank’s innovative initiatives and digital transformation strategies, highlighting its investments and acquisitions in technology-focused firms. BofA’s focus on integrating AI into both front and back-office operations is showcased, with a notable achievement being the success of Erica, its AI assistant, introduced in 2018. As AI capabilities have advanced, Erica has evolved to engage with over 37 million BoFa clients over 1.5 billion times since its inception, leading the bank to pledge further expansion of Erica’s capabilities to offer personalized banking, investing, credit, and retirement-planning advice.
Additionally, the report reveals BofA’s strategic use of blockchain technology, particularly through its adoption of the Paxos Settlement Service, a blockchain-powered platform provided by Paxos Trust Company. This initiative aims to streamline trade settlement processes, addressing challenges related to time delays in traditional settlement systems.
BofA’s foray into blockchain experimentation began in 2021, aligning with other global financial giants like Nomura Holdings and Credit Suisse. The report notes that stock settlement practices, traditionally dominated by the Depository Trust & Clearing Corp., faced time constraints with settlements occurring only for trades logged before 11 a.m. BofA’s engagement with the Paxos Settlement Service marks an effort to overcome these constraints and facilitate more efficient trade settlements.
Ranked as the second-largest American bank, BofA has positioned itself as a significant investor in blockchain technology, with CEO Brian Moynihan disclosing the bank’s possession of hundreds of blockchain patents. Despite its active involvement, BofA, like its counterparts on Wall Street, remains cautious about embracing new technologies and continues to participate in pilots and trials.
In the pursuit of its digital transformation, BofA has earmarked a substantial portion of its $3.8 billion innovation budget for the current year to be allocated towards investments in AI and blockchain technologies, reflecting the bank’s commitment to staying at the forefront of technological advancements in the financial sector.