Bank of America is being judicious in deployment of AI within its operations but already seeing the role the technology is playing in maintaining its expenses. 

“We are in a regulated industry,” Chief Executive Brian Moynihan said during the bank’s third-quarter earnings call today. This means the bank has to be certain of its AI models, and cannot make excuses for mistakes made along the way.

“If we use [AI] for mortgage loan automated underwriting, we’re liable for the outcome, irrespective of how we did it,” Moynihan said. 

The $2.5 trillion bank is in the process of “getting its data right” and testing AI models in a controlled environment before rolling it out to clients, he said. Bank of America spent $3 billion between 2012 and 2019 on data processes preparing for its AI initiatives, he added. 

While the bank is hesitant to roll out AI at speed and scale, it has continued to deliver AI through its Erica chatbot for retail and commercial clients, Moynihan said. “That model took us years to perfect.” 

Within the bank’s retail customer base, Erica recorded 20.4 million interactions, up 3.5% year over year, according to today’s earnings report. 

The chatbot is being used among institutional customers as well, and its “adoption is rising very fast,” Moynihan said. Commercial customers recorded 3.4 million interactions with Erica during the quarter, up 10% YoY. 

Other areas in which the bank has deployed AI in the past quarter are: 

• Internal operations; 

• Coding assistance; and 

• Digital banking. 

Managing expenses, improving efficiency  

A major benefit of AI deployment is its ability to provide efficiencies that allow the bank to maintain its expenses, grow revenue and gain more efficiency, Moynihan said. 

During the quarter, the bank reported: 

• Revenue of $28.1 billion, up 11% YoY; 

• Headcount of 213,384 compared with 213,481 in Q3 2024; 

• Noninterest expense of $3.9 billion, up 13% YoY, driven by tech and personnel costs; and 

• An efficiency ratio of 62%, compared to 65% in Q3 2024. 

“We feel good about [deploying AI], whether the idea is to grow revenue faster than expenses or creating operating leverage,” Moynihan said. 

Bank of America stock was up 4.73% to $52.46 from market open today. The bank has a market capitalization of $388 billion. 

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