Bank of America Corp. will keep cutting costs even after reaching its annual spending goal of $53 billion by finding more ways technology can replace people, Chief Operating Officer Tom Montag said.
“There’s more to do after that,” Montag said Wednesday at a conference in New York. “How much technology can we do that replaces people? How many things do we have that we can use it? How much big data can we use that helps us target better and not waste our time on certain things?”
Chief Executive Officer Brian Moynihan announced the expense target in July 2016 after profit dropped more than 20 percent, as persistently low interest rates cut into earnings at the Charlotte, North Carolina-based company. Bank of America has previously said it was on track to meet the goal by 2018. Total expenses were $57.7 billion in 2015 and about $55 billion last year.
Montag, 60, said the firm will take a closer look at businesses that can be optimized, and gave foreign-exchange trading as one example.
“I’m going to go back and look at your FX business, how much is straight-through processing?” Montag said, referring to processes that avoid human intervention. “How much can I spend to lower the amount of people I have that touch this? Can I go from 70 percent straight through to 99 percent? Every one of those things adds up to hopefully make us more efficient.”
Finance firms are using technologies including machine learning and cloud computing to accelerate a push into automation, meaning many front-, middle- and back-office employees will have to adapt or find new positions. Most workers on Wall Street expect to benefit from the changes: A survey of more than 3,200 financial professionals by recruiting firm Options Group last year found a majority expect new technology will improve their careers, for example by improving workplace performance.
Another area where technology will help save money is in the firm’s markets risk-management and trading platform, Montag said. The firm will have finished consolidating disparate systems by next year, he said. There are 1,300 applications used in the markets business that required $1.3 billion to maintain and run, so reducing those will cut costs, he said.