With a $3.4 billion budget, Bank of America Corp. (NYSE: BAC) is poised for extensive innovation in new technology this year. The 13% budget increase signals the bank is intent on pushing aside the competition.
Charlotte-based BofA takes a "citizen" approach to innovation, meaning it does not limit invention to one lab or team. Employees across the bank are encouraged to innovate. That produces more ideas from a range of perspectives, said Cathy Bessant, chief operations and technology officer at BofA. She has been in that role for about a decade.
"There's no question that 2020 was a set of human tragedies in so many ways, and I'm proud of how we've weathered it," she said. "I think 2021 will be challenging, but I think we've got the right dedication and the right work going on."
Bessant said the industry is well past digital adoption. It is a customer requirement. The pandemic sharpened BofA's focus, she said, with its technological capabilities being tested more than ever daily. The team focuses on security, data architecture, artificial intelligence and modeling, among other topics.
All innovation — whether for external or internal use — is focused on a better client experience, Bessant said.
Katherine Dintenfass, senior vice president of digital banking at BofA, said teams look at data metrics but also interact directly with clients to learn what they want. She is the bank's second-leading patent holder. BofA's goal is to encourage inclusive and diverse ideas with brainstorming sessions and bring in employees from multiple divisions, she said. The bank vets ideas for risks to customers or to the business.
Customers still want to save time and money, Dintenfass said, but the ways to achieve that have changed.
"People will sometimes ask whether a bank really is a technology company," Bessant said. "We're not innovating for the theory of innovation. We are very focused on customer (-facing) innovation. We do innovation with a purpose, not innovation for science or theory."
BofA filed 722 patent applications last year — a record for the company. It was granted 444 patents in 2020. For context, that is close to triple the number of patents granted in 2012. Companies such as Apple Inc. (NASDAQ: AAPL) and Alphabet Inc. (NASDAQ: GOOG) have cited some of BofA's previous work in their own patent process, Bessant said.
The bank's patent portfolio includes more than 4,400 patents and applications, with about 5,700 inventors represented. Just over 500 of BofA's issued patents are related to online and mobile banking.
Dintenfass said the patent process can take anywhere from six months to multiple years.
Jinna Kim is a Charlotte-based inventor with the bank, although she doesn't think of it as a separate identity. She views it as learning something new and then executing on those ideas.
Kim said she pulls from her on-the-job experiences as a consumer products strategic analyst. She has been with BofA for more than nine years, but her knowledge and involvement with patents grew over time. Kim has co-filed several patents in the last couple of years. Topics range from cognitive automation to open banking.
Inventors like Kim receive sustained investment from the top down. The total technology budget per year is about $10 billion. CEO Brian Moynihan doubled the pool for new development in 2010 from $1.5 billion to $3 billion annually. New development is a collaborative process, where the bank's technology, intellectual property and legal teams work together to identify patent work and finish the process.
Bessant praised her team for keeping up vital collaboration, even in a work-from-home environment. About 85% of BofA's workforce is still working remotely.
