Introduction
As the technology landscape evolves, companies have to consider various types of innovation to remain relevant to the market and consumers. For banks, technological growth may include internal processes to protect data and increase processing speed. Furthermore, these businesses can work to improve the client experience, simplify access to accounts, and improve advisory services. In the last decade, Bank of America has implemented most of these strategies, becoming a technology-driven company.
Technological and Social Advancements at Bank of America
It is vital to note that Bank of America has undergone major changes in the last decade, growing substantially and becoming a modern company that does not rely on its long history in banking. As McCormick (2021) points out, the digital aspect of banking has grown substantially in recent years, requiring most banks and other businesses to adapt to new requirements. In 2021, Bank of America reported having over 40 million digital users, and approximately 32 million of them primarily accessed their accounts via mobile phones.
These numbers reveal a significant shift toward mobile banking compared with previous approaches, including real-life and computer-based ones. Using one’s smartphone to transfer money or invest went from a unique feature to a necessity for many consumers as they began relying on their phones and other devices to complete daily tasks (Cocheo, 2024). Therefore, the business saw a need to innovate its product – the banking service – and its processes, including how employees interacted with clients.
Digital Transformation
The primary type of innovation that Bank of America has focused on in recent years is advancing its technologies. To address this need, Bank of America enhanced its banking application and website to create a useful, feature-rich experience. According to Cocheo (2024), the company integrated five applications into one, combining functionality for private banking, benefits, consumer investing, and other services. This new approach catered to a growing audience of mobile users who wanted a streamlined experience to access multiple features simultaneously. As a result, Bank of America now offers the option to create a single login for multiple platforms and access them easily through one app.
This step can be considered a radical innovation that combines product- and process-related changes. The change is substantial because the company introduced a completely new channel for accessing its services and products (Hisrich et al., 2020). Instead of slowly improving each application, Bank of America chose to completely redefine the client experience. Customers gained a new way to access the bank, and the bank changed how it processed online information (McCormick, 2021). Therefore, both the product and its processes have been altered, and Bank of America changed its course to develop in the digital world.
To build on this innovation, Bank of America can continue expanding its online services and increasing customer presence in the app. Currently, not all users are using the new features, which limits the bank’s outreach and may reduce its value generation. Moreover, mobile fraud remains a significant problem, and the business should focus on security (Cocheo, 2024). A more secure experience may reduce the risk of data leaks and financial issues, increase positive user feedback, and deliver greater value to the company.
Social Development
While digital transformation is a prominent process at Bank of America, it also grows through social development. According to the company’s reports, it has increased its collaboration with non-profit organizations, sustainability businesses, entrepreneurs, and small firms to provide them with an opportunity to develop (Bank of America, 2022). For instance, since 2013, Bank of America has issued nine sustainability and social bonds to the market. Furthermore, the bank provided capital to diverse causes, including Hispanic and Black-led institutions, healthcare centers, schools, and other organizations (Bank of America, 2022). The business also continues to participate in coalitions that address contemporary economic challenges, environmental issues, and banking advancements.
The discussed range of social activities is an incremental, process-driven innovation. The bank slowly increased spending and developed new relationships and partnerships (Dess et al., 2021). This strategy focuses not on the product that it offers to its consumers but on its marketing, network, and social stance (Hisrich et al., 2020).
Similar to digital transformation, sustainable development is a popular approach widely viewed positively by society. To continue adding value, Bank of America can grow in the areas of sustainability and social change. The company can integrate its resources into the process and work on energy conservation and clean energy use. Currently, Bank of America considers technological change essential for business growth. Integrating the two types of innovation – digital and social – can create greater value, expand the company’s presence, and improve its image.
Conclusion
Bank of America has introduced incremental and radical changes in the last few years. On the one hand, it completely changed its digital user experiences by using new technology and rebuilding its mobile application. On the other hand, it has contributed to various social causes, creating an image of a sustainability-conscious business. The value-creation strategy for Bank of America must focus on data security, increased efficiency in digital services, clean energy use, and conservation efforts.
References
Bank of America. (2022). Bank of America mobilized and deployed $250 billion in sustainable finance capital in 2021.
Cocheo, S. (2024). How Bank of America unified five apps into one experience.
Dess, G. G., McNamara, G., Eisner, A. B., & Lee, S-H. (2021). Strategic management: Text and cases (10th ed.). McGraw-Hill.
Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2020). Entrepreneurship (11th ed.). McGraw-Hill.
McCormick, E. (2021). BofA CEO on future of banking: ‘We’re clearly a technology company.’