The news: At Bank of America’s (BofA) investor day, its first in over a decade, the bank said it spent more than $118 billion on technology in the last 10 years. In 2025, its annual spending on new technology initiatives will reach $4 billion out of a total of $12.7 billion. Of the $4 billion, $338 million will go to data capabilities. This is a crucial and scalable foundation for enterprise AI that includes unified data across business and advanced analytics.
Zooming out: Enterprise-scale AI is the new norm for leading banks. And the AI revolution is widening the gap between banks that have been successful and those that are behind. Even banks that were wary now treat AI as crucial to modernization and business evolution, rolling out tools across the organization.
It may be a surprise where some banks land on AI sophistication. BofA, despite its technology investments, lags JPMorgan, Capital One, and Wells Fargo, and others in a benchmark that ranks the maturity of banks’ AI strategies. That’s even after seven years of BofA’s AI agent, Erica, which has scaled up from a retail customer service tool to an enterprisewide front- and middle-office application.
AI gains traction: BofA uses AI across consumer, commercial, corporate, and private banking; capital markets; and wealth management. It reports 50 million consumer Erica users; heavy AI use in its commercial banking platform, CashPro; genAI tools for search, summarization, and synthesis of market research; and in operations as a software development copilot and for fraud detection.
Our take: In the AI race, banks that aren’t already ahead will fall even further behind. Increasingly sophisticated automation as well as an AI-assisted jump in employee productivity mean AI investments quickly compound on themselves. Last month, JPMorgan said it had already broken even on its $2 billion AI investments. And Capital One has touted itself as “a technology company that happens to do banking.” It’s increasingly hard for traditional financial services companies to keep up.