Bank of America takes this year’s top honor from Global Finance.
Not even a global pandemic could dry up the innovation wellspring at Bank of America. The global powerhouse filed for 722 patents in 2020, topping its previous record; and the US Patent and Trademark Office has granted it another record-making 444 patents so far in 2021, even as patent grants overall shrank 1%.
“The pandemic acted like a turbocharged engine to our innovation strategy,” states Faiz Ahmad, head of global transaction banking at BofA. “I would not say it changed what we do but rather how fast we’re able to bring things to market.”
The bank has not been sluggish rolling out new products and services. In the first quarter of 2021 alone, its CashPro platform got 17 technology updates, with an additional 18 updates specifically related to loan origination and forgiveness from the government’s PPP [Paycheck Protection Program]. “That’s more than double the volume of tech releases we’d do in a ‘normal’ quarter,” Ahmad says, further noting that “our teams did all this when the grand majority of them were working from home.”
Clients were on a similarly accelerated timeline for digital transformation. Ahmad says the use of e-signatures increased by 309% between April 2020 and March 2021, and in 2020 the CashPro app processed $174 billion in payments—more than the $159 billion processed by Venmo that year.
“Any previous reticence clients might have had to use their mobile device for treasury operations has pretty much evaporated,” he says. “This augurs well for continued innovation, since it will divert resources previously invested in paper-based processes to digital ones.”
Application programming interfaces remain the hottest trend in transaction banking. “APIs are going to continue to be a huge driver of banking evolution, since they address two key areas of focus for corporates: seamless integration into a company’s ERP [enterprise resource planning] system and access to real-time data,” explains Ahmad.
Another area that is evolving at a rapid pace is the consumerization of wholesale banking—driven by corporate treasurers’ expectation to have the same digital experience at work as they do in their personal lives. “It’s also a result of corporates getting closer to their end customers and needing to manage new and emerging payment types,” Ahmad says. “All this intelligence comes directly from speaking to our clients—both informally and through our numerous advisory councils. We use their input to expand or introduce new capabilities, such as mobile wallets and the launch of new cross-border payments solutions.”
Other notable launches by the bank include its CashPro Forecasting offering, which uses machine learning technology to assist companies in achieving accurate and efficient cash forecasts. Intelligent Deductions is designed to reduce the volume of write-offs for businesses and allows them to reduce their days deductions outstanding.
In September 2020, Bank of America issued a $2 billion Equality Progress Sustainability Bond to advance racial equality, economic opportunity and environmental sustainability. It also has made numerous alliances and partnerships to support the global economy and communities most affected by the pandemic and economic downturn.
A Decentralized Approach
Bank of America famously follows a decentralized model for innovation. There are no designated labs, no special teams. Innovation is expected and fostered throughout the organization. “Simply put, [innovation] is part of everyone’s job who works here,” Cathy Bessant, Bank of America’s chief operations and technology officer, said in a news release in September. “It is in our DNA that every day we ask what we can do to improve our clients’ financial lives.”
That approach seems to be serving the bank well. From ground-breaking technologies to novel philanthropic approaches, Bank of America has been a leader in innovation. A $14 billion annual global technology and operations budget, which has $3.5 billion dedicated to new initiatives alone, should ensure it has the capacity to keep reimagining financial services.