Digital Banking Becomes Bank of America’s Deposit Engine

Bank of America’s second-quarter earnings call Tuesday (July 14) was dominated by a simple message: Consumers in the United States are spending, companies are borrowing, capital markets are open, and the economy is proving stronger than expected.

That backdrop helped the bank cruise past its earnings targets. Beneath the victory lap, however, CEO Brian Moynihan and Chief Financial Officer Alastair Borthwick also offered signals on artificial intelligence, private credit, consumer risk and the bank’s increasingly digital operating model.

For Bank of America, AI is becoming both a revenue engine and a productivity tool. Borthwick said the bank is benefiting from financing the “massive capital investment and infrastructure build” around AI, particularly through investment banking and Global Markets. Internally, Bank of America employees are generating more than 400,000 AI prompts a day. The bank has approved more than 300 AI use cases, including 114 live generative AI applications and 34 that are fully implemented.

The payoff should extend beyond cutting costs, management said.

“Here’s what’s going to come out of that, we believe: growth, efficiency, risk management and resiliency,” Borthwick said.

Moynihan added that AI is already making software development more productive, so the same technology budget should produce more code over time. Still, the technology needs controls.

“It has great utility,” Moynihan said. “It has to be carefully managed. You have to have your data perfect. You have to have your rules base, so it doesn’t make mistakes.”

Private credit also came up, although management used the broader phrase “private capital lending.” Moynihan said some highly leveraged activity had moved outside the banking system, but parts of it are returning on terms banks can accept. More broadly, he said feared credit problems have not materialized.

“The issues of the moment, whether it’s real estate four or five years ago or whether it was private capital lending and all this stuff, just aren’t surfacing the way people thought they would,” Moynihan said.

The consumer picture was similarly steady. Card charge-offs and delinquencies improved from both the prior quarter and a year earlier, Borthwick said. Bank of America’s credit card charge-off rate fell to 3.55%, from 3.82% a year ago, while early- and late-stage delinquencies improved for a fifth consecutive quarter. At the same time, combined credit and debit card spending rose 9% to $266 billion, and management said broader consumer spending was running more than 6% above last year during the second quarter.

Digital Banking Stars in Q2

Digital banking is increasingly tied to the bank’s funding advantage. Bank of America reported roughly 50 million active digital banking users, 24.6 million active Erica (AI assistant) users and 4.4 billion digital logins during the quarter. Seventy percent of consumer sales were digitally enabled.

Digital tools, security and rewards help the bank win operating accounts and maintain a favorable deposit mix, Borthwick said. It’s a reminder that digital engagement is not just a service channel, but a core part of deposit economics.

On the economy, the bank’s research team raised its 2026 U.S. growth forecast to 2.2%, Moynihan said, calling the economy “more durable than expected,” supported by consumer spending, AI-driven investment and lower energy costs. He also identified inflation and tight monetary policy as the main risks.

Commercial loan growth was broader than the AI buildout, with business banking, commercial banking and corporate banking all contributing, Borthwick said.

Cryptocurrency and stablecoins were not discussed in either the prepared remarks or the analyst Q&A. On the call, Bank of America’s digital story remained centered on Erica, Zelle, CashPro and AI-enabled banking rather than crypto or stablecoins.

As for the headline numbers, Bank of America reported net income of $9.1 billion, up 27% year over year, on revenue of $31.6 billion, up 15%. Diluted earnings per share rose 34% to $1.21. Net interest income increased 9% to $16 billion, investment banking fees jumped 50% to $2.1 billion, and the bank delivered 6.6% operating leverage with a 17% return on tangible common equity.