On Wednesday (Jan. 14), executives framed the quarter as evidence that years of investment in technology are paying off not just in customer engagement, but also in productivity, cost discipline and scalability across the franchise.
AI, Erica and the Shift From Tool to Infrastructure
During the conference call with analysts, CEO Brian Moynihan emphasized that AI-driven platforms such as Erica have evolved across consumer facing and back office functions.
“You should note the impact of Zelle and the continued user growth, and also the impact of Erica, our AI agent, and its use both across our businesses and with our teammates,” Moynihan said. He later put a sharper point on how Erica is influencing staffing and productivity decisions inside the bank.
The company noted that Erica interactions in the quarter topped 169 million and that users were 20.6 million consumers, where that figure had been 19.7 million a year ago. The company’s data also indicated that Zelle volumes were $144 billion in the fourth quarter vs. $127 billion last year.
Chief Financial Officer Alastair Borthwick reinforced that the payoff from AI and automation is showing up in expense management, allowing the bank to redirect resources rather than add headcount.
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“We saw productivity improvements through AI and digitalization more generally, and those enabled us to add client-facing associates as we eliminated work and roles in our operational support areas,” Borthwick said.
Consumer Spending and Card Activity Remain Strong
Consumer activity remained steady during the quarter, supported by stable employment and household balance sheets.
According to the company’s earnings presentation, combined consumer credit and debit card purchase volumes reached $255 billion in the fourth quarter, up 6% year over year. At the same time, digital channels continued to capture a growing share of activity, with 69% of consumer sales conducted digitally and active mobile banking users rising to 41.4 million from last year’s 40 million.
Credit Trends Show Incremental Improvement
Credit performance continued to normalize, particularly on the consumer side. Borthwick said net charge-offs declined for a second consecutive quarter, reflecting stabilization in credit cards and easing pressure in commercial real estate.
“The net charge-off ratio fell to 44 basis points and is down 10 basis points year over year,” he said. The earnings presentation showed consumer net charge-offs of $1 billion in the quarter, with the credit card charge-off rate improving to 3.40%, down from 3.46% in the prior quarter.
Account Growth and Digital Onboarding
Account growth remained a cornerstone of the bank’s strategy. Bank of America added approximately 680,000 net new consumer checking accounts during the year.
Digital onboarding continues to play a growing role. The bank opened roughly 114,000 new bank accounts tied to wealth clients, with a rising share initiated through digital channels.
Regulation and Credit Card Pricing Remain a Watch Point
Executives acknowledged that regulatory scrutiny, including renewed attention on credit card pricing and potential caps, remains an overhang. As Moynihan contended during the call, “the explanation we’ve always made sure people understood is that the if you bring the caps down, you’re going to constrict credit, meaning less people will get credit cards, and the balance available to them on those credit cards will also be restricted.”
As he said elsewhere during the call, “risks remain out there. They always do, but we’re encouraged and constructive on the year ahead.”
Shares were down 3.7% on Wednesday.
