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Tag: Brian Moynihan

  • Bank of America CEO: Our Efficiency Is Driven By Technology

    Bank of America CEO: Our Efficiency Is Driven By Technology

    “It’s absolutely a fair statement that we are actually a technology company that is really fabulous at banking,” says Bank of America CEO Brian Moynihan. “We have 37 million digital customers, 28 million mobile customers. It’s all been automated, wires and stuff, but now the interface with the customers is much more automated. That efficiency is driven by the technology enablement of the consumer and wealth management companies and it’s always more efficient to serve it that way. So that 57 percent efficiency ratio, that’s enabled by technology.”

    Brian Moynihan, CEO of Bank of America, discusses how their massive investment in technology has made them dramatically more efficient and customer-centric. Their focus on digital banking through their app has, in particular, appealed to Millenials. Moynihan says that if Bank of America were a “Millenial-Only” bank, it would still be one of the largest banks in the country. Moynihan was interviewed by Jim Cramer on CNBC: 

    Our Efficiency Is Driven By Technology

    It’s absolutely a fair statement (that we are actually a technology company that is really fabulous at banking). At the end today, we have really talent teammates, the computers that they operate and the technology that they operate, and then frankly buildings to keep it all dry so it works. That’s what we have. Those teammates use those computers to either build them so clients can work themselves or work with them to help serve clients. We have 37 million digital customers, 28 million mobile customers, the numbers just roll in. 

    By the way, what we highlight in our earnings report on the institutional side, you’re seeing in the treasury services, it’s all been automated, wires and stuff, but now the interface with the customers is much more automated. That efficiency is driven by the technology enablement of the consumer and wealth management companies and it’s always more efficient to serve it that way. Yet you have to have great people when the face-to-face meeting comes up when the need is there. 

    So that 57 percent efficiency ratio, we ran about $13.3 billion in expenses, that is seven of the last eight quarters we ran between 13.1 and 13.3, one was a little higher. In that time we’ve invested in thousands of relationship management people, $3 billion a year in technology, probably 60-70 brand-new branches and retooled probably a thousand branches. All of that investment going in at the same time expenses were flat. That’s enabled by technology. 

    If Bank of America Were a “Millenial-Only” Bank, It Would Still Be Huge

    That’s the key (making a banking app design that does appeal to everybody). It works for general consumers, it works for wealthy consumers that work for small companies, it works for big companies. With that many digital customer’s everybody’s using it. Now does it cohort on age a little bit younger? What I said in yesterday earnings about Millennials was more about a debate about whether banks like us are appealing to Millennials? 

    We open accounts at three times the population rate in our new sales. We have about twice the population rate of Millennials in our customer base today. They have $60-70 billion in checking deposit, just the Millennials. Then with Gen Z, add another chunk on top of it. It’s already a huge customer base. Then the 16 million customers who are digital-only Millennials have $200 billion of investments, deposits, and loans with us. It’s already a big business. As a Millennial only bank, it would be one of the biggest banks in the country, probably the fifth or sixth largest bank.

    Bank of America CEO Brian Moynihan: Our Efficiency Is Driven By Technology
  • It Takes Both High-Touch and High-Tech, Says Bank of America CEO

    It Takes Both High-Touch and High-Tech, Says Bank of America CEO

    Bank of America has gone massively digital and it is now powering their growth. “We had a billion and a half logins to our apps last quarter,” says Bank of America CEO Brian Moynihan. “This is not theoretical. We are one of the largest digital companies. We are also one of the largest physical companies. It takes both high-touch and high-tech.”

    Brian Moynihan, CEO of Bank of America, discusses the digitalization of banking with Fox Business at Davos 2019:

    Consumers Have a Branch in Their Pocket

    On the consumer side, they have a branch in their pocket. Anything you can do at a branch, in the traditional banking sense, or over the phone, you can do in your app. There are 36 million digital users, 26 million mobile users who are not digital users growing at 10-15 percent a year. Sales are at the 20 percent level and 25 percent of all sales are digital. Our digital mortgage product is growing. Our digital auto product is growing. What you can do is do everything.

    Half of the checks we have are deposited at the ATM and a little over 25 percent of deposits are by people taking pictures of them with their phone. It’s the exact same activity but you don’t have to go anywhere. You can do everything.  

    Then you have Erica. We have five million Erica users and it only started a little over a year ago. That’s where people can just talk and ask questions and it learns about you. It’s artificial intelligence voice recognition program. When you pay your bills you just say, “I need to pay X.” It will say, “You want to pay X, here is the amount.”  Think about how easy it is versus writing out checks or even going into digital bill payment. The technology enables consumers to do more faster and easier.

    Apps on the Institutional Side Getting Interesting Too

    The applications on the institutional side are getting interesting too. Believe it or not, corporate treasurers want mobile capabilities also. With Cashpro Mobile they can initiate a $5 million wire on a mobile device while sitting in a meeting with all the controls around it and all of the foreign currency features.

    To me, it was… really? But absolutely, that’s the way they want to do it because that’s the way they are used to operating.

    It Takes Both High-Touch and High-Tech

    We had a billion and a half logins to our apps last quarter. This is not theoretical. We are one of the largest digital companies. We are also one of the largest physical companies. It takes both high-touch and high-tech.

    What have we learned? We are always a curious company and always out their learning. When we go and talk to fintech companies or observe what they are doing, more importantly, we’re trying to learn what does the customer see in that activity that they don’t see in our activity? Then we look at how we can adapt to that.

    Are we interested in acquiring fintech companies? There will be no acquisitions, we just work.

    Small Business Still Very Optimistic About the Economy

    We do more small business than most of the people in the world. When you think about small business, what’s interesting is that the business community in the United States is very optimistic still. Even though they are not as optimistic as they were at the highest point they’re still very optimistic on a relative basis.

    In our small business surveys late last Fall they are saying, “We’re going to invest more. We’re going to hire more. We can’t get people.” Those are the common themes.

    I think it is a good year for investment as long as we solve a couple of key issues. We have to get the sutdown done. The incremental impact of the workers is important but it’s also just the process of getting approvals and stuff is being held up. Then ultimately the trade situation has to be solved. I’m not giving you any news, everybody says that, but it’s time to get some of this stuff done.


  • Bank of America CEO: Digitalization Is Not Something That’s Coming, It Already Exists

    Bank of America CEO: Digitalization Is Not Something That’s Coming, It Already Exists

    Digitalization is not something that’s coming, this is something that already exists, says Bank of America CEO Brian Moynihan. He says that 25 percent of their sales are done on digital. Moynihan says his goal is to bring the whole banking system to the digital age to make it more efficient for customers.

    Brian Moynihan, Bank of America CEO, discussed the digitalization of banking and much more during an interview on CNBC:

    Digitalization is a Big Boon for Everybody

    Digitalization is a big boon for everybody in a sense in that you can continue to provide better service for the customer and take the cost structure down which then can pass through to the customer. The way to think of all this work on a consumer side is that we have 26 million mobile customers, 25 million digital customers, about 1.5 billion logins last quarter. This is not something that’s coming, this is something that already exists. About 25 percent of our sales are done on digital.

    Digitalization Improves Service and Reduces Costs

    All this is extremely important in how we run our franchise. What that has done for the customer is give them better services on their time, the way they want to do it, 24/7. At the same time, it reduced our operating costs so we can take out overdraft fees on point of sale debit, ten years ago now almost. What allowed us to afford that was to change the operating structure. That makes this very good.

    Small banks and larger banks are participating in digitalization. We helped small banks to drive digital payments. The volumes are growing 100 percent per year for us with that and across the board.

    Bringing the Whole Banking System to the Digital Age

    The goal is to bring the whole banking system more and more to the digital age and make it more efficient for the customers. The key is that on the commercial side it also goes on. Everyone talks about consumers, but on the commercial side, the same impacts going. CashPro Mobile, a product we have, is up and operating very efficiently. When you think that a treasurer of a company would sit down at their desk to do an interface to send it, they want their mobile interface because that’s their daily life. It’s all good for all of the companies.