Bank of America to spend $3.7B on tech development in 2023
Bank of America Securities Financial Services Conference
Bank of America is increasing its technology development spend 9% year over year in 2023 as the bank continues to invest in digitization.
The $3.1 trillion bank will spend $3.7 billion on technology development in 2023, up from $3.4 billion in 2022, Chief Executive Brian Moynihan said at the Bank of America Securities Financial Services Conference on Tuesday.
The technology development spending “goes in different directions,” Moynihan said, noting, “A big part of this is integrating products and services that are out there from the best companies in the world and then figuring out how to make them work better.”
The capital the bank is spending is going toward company investment, patent development and software development – both internally and externally, Moynihan said. “It’s software that we can acquire and integrate and then also homegrown software.”
For example, the bank invests in payment platform Zelle to enhance its transaction and deposit business, Moynihan said.
Another investment the bank made in technology was the development of its AI-driven virtual assistant Erica, which was not built entirely in house, Moynihan said. In fact, the bank gathered a team to develop the natural language processing and analytical capabilities to build the product “for us and with us.” He added there wasn’t a product like a OpenAI’s ChatGPT at the time that had those AI-type capabilities that could be customized for the bank.
2022 tech spend
The bank tightened its spending in the fourth quarter of 2022 by slowing its hiring and prioritizing cost efficiency, Moynihan said during the bank’s Q4 earnings call last month. The bank’s cost-saving efforts were in preparation for an economic downturn.
The increase in technology development spend in 2023 follows a more cautious Q4, Moynihan said. Spending is being balanced through investment for growth in talent, branches and opening in new cities, he previously said. “We’re paying for this stuff as we go.”
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