Brief:

• Bank of America debuted a digital assistant that uses artificial intelligence (AI) to improve customer service by learning how its 25 million mobile customers interact with the app. "Erica" can respond to voice commands, text or gestures like screen taps or swipes, according to a company announcement.
• Erica can assist customers in handling banking tasks like bill payments, searching past transactions, locking or unlocking debit cards, transferring money between accounts or sending money to friends and family with Zelle, a bank-powered digital payments network. The bank said it will add more features in the coming months such as payment reminders and personalized budgeting tips.
• Bank of America began piloting Erica with its employees in 2017 and launched a limited rollout to customers in March. The nationwide rollout will continue through June.

Insight:

Bank of America's Erica, which has been in development for a couple of years and was first announced in late 2016, is another example of how budding AI, predictive analytics and natural language processing tech are expanding the capabilities of mobile apps. Not only does Erica handle simple queries about account balances, it also can serve as somewhat of a handheld financial adviser that helps to track personal spending, offer money-saving tips and suggest personalized steps to improving one's credit score. The bank integrated more than 200,000 ways for users to ask financial questions through Erica, demonstrating the complexity of handling natural-language interactions.

Voice-controlled digital assistants are steadily being added to more consumer products and services, while nearly half of U.S. adults (46%) said they use these applications to interact with smartphones and other devices, per Pew Research Center. Usage will likely grow as digital assistants gain more capabilities and evolve in sophistication.

Bank of America is flexing is digital tech muscles as mobile banking continues to grow more popular, with 63% of U.S. adults who use a smartphone saying they have at least one financial app. The average smartphone user has 2.5 financial apps, although they are more popular among younger adults. Millennials have 3.6 apps on average, compared with 2.3 for Gen X and 1.4 for baby boomers. Apps for mobile banking have become some of the most widely used by Americans, per a mobile banking survey by Citibank. About one-third (31%) of consumers use their mobile banking app the most, behind apps for social media (55%) and the weather (33%), the survey found.

AI tech is set to continue transforming the financial services industry, with former Citigroup CEO Vikram Pandit predicting that 30% of banking jobs will be wiped out by in AI in the next five years, per the Financial Times. Mizuho Financial Group in Japan plans to use AI to replace 19,000 people by 2027, or one-third of its workforce. Seventeen of the world's banks deploy AI in client-facing front office operations, including everything from Citi's Facebook Messenger chatbot to UBS's use of Amazon's virtual assistant Alexa for customer service. JPMorgan demonstrated the importance of AI technology to financial operations with this month's hiring of Manuela Veloso as its first head of AI research.