- Bank of America redesigned its mobile app to improve navigation for its 29 million mobile banking customers. The bank early next year will provide more services through Erica, its virtual voice assistant that has about 9 million users, per an announcement.
- Erica's upgraded features will let users see more information about how much money they can save by paying down their credit card balances faster. Erica also will have added security features, including more information about potential unauthorized card charges and the ability to dispute them directly through the app without making a call.
- Bank of America said Erica has handled about 75 million client interactions since its introduction, which started as a pilot program among employees two years ago before a nationwide rollout in 2018. More than 2 million customers use the app in Spanish, and 1 million clients have signed up for its digital debit card for payments, per the announcement.
Bank of America's updated app and planned rollout of additional Erica services demonstrate the importance of mobile banking in expanding its customer base, especially among tech-savvy young adults who are more comfortable with mobile payments and are seeking a broader range of banking services on the go. Mobile banking has become a key growth driver for "too big to fail" banks like Bank of America, JPMorgan Chase, Citigroup and Wells Fargo that have been prevented from acquiring other banks by stricter laws passed after the 2008 financial crisis.
Instead, banks have been spending heavily on information technology, including mobile banking and artificial intelligence (AI) technology that automate a growing slate of services. Personnel costs are a significant expense that many banks are working to eliminate with advanced technology. The $150 billion that U.S. banks spend each year on technology, more than any other industry, will lead to 200,000 job cuts in the next decade, according to a forecast by Wells Fargo Securities Senior Analyst Mike Mayo. Most of those cuts will consist of back office, branch and call center jobs that will become automated.
Bank of America's upgraded mobile services aim to support growth in its consumer bank, whose revenue rose 3% to $9.7 billion in Q3 from a year earlier on expanded lending activity. The bank reported a 76% surge to $20.8 billion in payments through Zelle, the digital platform that U.S. banks created to compete with PayPal's Venmo app. Mobile activity made up 52% of its digital consumer sales, demonstrating the importance of the bank's app in driving growth.