Bank of America expects to increase technology development spend by nearly 12% year over year as the race for generative AI innovations engulfs the financial industry.

The bank is projected to hit $3.8 billion in tech spend in 2023, up from a February projection of $3.7 billion, Chief Executive Brian Moynihan said Thursday at wealth management firm Bernstein’s annual Strategic Decisions Conference.

“We’re investing a bucketload,” Moynihan said, detailing initiatives ranging from AI development to payment automation.

The $3.1 trillion bank’s AI-powered virtual assistant, Erica, reached 166.7 million user interactions in Q1 2023, up 35% YoY, according to the bank’s Q1 earnings presentation. In May, the assistant was deployed for internal use as it approaches its fifth birthday.

The bank is also approaching other major milestones in its push to automate payments using payment platform Zelle, Moynihan said.

The bank’s Zelle transactions will soon surpass both Venmo’s total transaction volume and the number of ATM withdrawals at the bank, according to Moynihan. Payments on the platform have exceeded the number of checks written by Bank of America customers since 2021.

Allocating resources

Bank of America’s shift toward automation has allowed the bank to cut costs, including personnel and brick-and-mortar, Moynihan said.

The bank closed about 300 branches in the past year due to a drop in the number of customers depositing checks in person, he added.

However, the bank is opening branches in other markets where it is underrepresented, including Minneapolis and Columbus, Ohio, Moynihan said.

“We’re always trying to… add where we need and take out where we don’t — and that then allows us to manage expenses,” Moynihan said.