Bank of America Consumers Boost Spending 8% as Digital Banking Deepens

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Highlights

Combined consumer credit and debit card purchase volume reached $265.7 billion, up 8% from $245.2 billion a year earlier, according to a Wednesday (Oct. 14) earnings presentation. Transactions, measured year to date, were up 4%.

Bank of America CEO Brian Moynihan said on a conference call with analysts that despite uncertainty in the broader economy, activity among the bank’s customers “continues to point to resilience in a growing United States economy.”

Digital Channels Deepen Engagement

Digital channels accounted for 71% of consumer sales, compared with 66% a year earlier, per the presentation. The bank had 50 million active digital users, up from 49 million, while 80% of consumer households were digitally active. Digital unit sales rose to 2.3 million from 2 million.

Erica, the company’s virtual financial assistant, registered a sharper increase. It had 24.2 million active users, compared with 20.4 million a year earlier, an increase of nearly 19%. Digital logins totaled 4.2 billion during the quarter. The figures put digital engagement alongside spending and deposits as another measure of the depth of the consumer relationship.

Checking accounts continued to grow as more activity moved online. Bank of America added more than 200,000 net new consumer checking accounts during the quarter, its 31st consecutive quarter of net growth. Checking accounts represented 59% of consumer banking deposits, and Bank of America estimated that 92% are customers’ primary accounts. Average consumer banking deposits were $948.6 billion, about $1 billion higher than a year earlier.

Consumer loan growth was concentrated in cards. Average consumer banking loans and leases were $321 billion, essentially unchanged from a year earlier, while average credit card balances rose 5% to $106 billion.

The additional card borrowing has not produced a comparable increase in credit stress. The consumer net charge-off ratio declined to 0.81% from 0.82%. Consumer loans at least 90 days past due declined to $1.43 billion from $1.47 billion.

Moynihan said Bank of America sees “zero stress in consumer credit quality,” while adding that paychecks and direct deposits are growing across income groups.

The quarter also provided a view of how Bank of America intends to extend its digital model into artificial intelligence. Moynihan said the company has more than 130 AI projects producing expected paybacks of two to three times their cost, with projected value increasing from $300 million to $700 million next year. Headcount was down about 3,500 year over year.

Management pointed to some caution around agentic AI. Asked whether autonomous agents could affect deposits, Moynihan said, “Human-in-the-loop controls ensure safety.” Operational checking accounts remain transactional, and customers’ excess liquidity is already directed toward yield products.

The bank is also working through a 2024 regulatory consent order. Moynihan said thousands of employees have been assigned to remediation and that management is focused on completing the work. Chief Financial Officer Alastair Borthwick said the related remediation and technology costs are already incorporated into the company’s expense run rate.

Shares were down 5% in early trading Wednesday after adjusted earnings and revenue missed Wall Street estimates.