Bank of America (BAC) CEO Brian Moynihan sees his firm not only as a legacy bank, but as a financial technology company on the cutting edge of digital innovation.
“We’re clearly a technology company,” Moynihan said at Yahoo Finance’s All Markets Summit on Monday. “We spend about $3.5 billion a year on new code implementation. New products and services are driven by technology.”
Digital payments have been a key component of Bank of America’s business, and have comprised a sizable proportion of overall transactions for the firm.
In total, BofA’s consumer customers have transacted about $2.8 trillion for the year-to-date through October, with this sum up 20% over the same period in 2020, Moynihan said.
“Of that $2.8 trillion I talked about, consumers at Bank of America moving money around, well over half of that is digital,” Moynihan said.
In its third-quarter earnings release last week, Bank of America noted that it had 40.9 million active digital banking users, with this total up by 4% over last year. About 32 million of these were mobile users.
Digital sales were up 27% to reach 1.4 million, the company added in its third-quarter print. And Zelle, a peer-to-peer payments network used by a host of big banks including Bank of America, JPMorgan Chase (JPM), Wells Fargo (WFC) and Capital One (COF), saw transactions jump 48% over last year.
The push to build out new technologies at the major banks has been a rising trend for years, as these institutions compete with newer, pure-play financial technology companies like PayPal (PYPL), Square (SQ), Robinhood (HOOD) and Affirm (AFRM).
Investors have also been increasingly turning toward companies leaning into digital services. The ETFMG Prime Mobile Payments exchange-traded fund (IPAY) has jumped by more than 81% over the past three years, outperforming the S&P 500 with a rise of nearly 72%, and the Financial Select Sector SPDR Fund with a gain of nearly 61% over that period. Bank of America’s stock, for its part, has risen by 80% in the past three years, before reinvested dividends.
And the number of digitally enabled services offered at the bank has also increased substantially over the past several years, Moynihan noted. In the years since Bank of America rolled out its voice activated virtual assistant Erica in 2018, the technology has grown to now engage in “hundreds of millions” of transactions per quarter, Moynihan said.
“Over the last few years, we’ve been able to digitally enable the mortgage transaction end-to-end, and the opening of a checking account end-to-end, and all these things,” he said. “We have Merrill Edge … it’s effectively a $300 billion-plus, growing rapidly, company that is in the online trading business, self-directed trading business for customers.”
“These are just huge numbers. But at the end of the day, you also have to remember what makes us unique is we also have 200,000 teammates,” he added. “So when those clients need people in our 4,000 branches … they can come in those branches and get appointments, and those can be set up digitally.”
“We’re high-touch and high-tech,” he said.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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