Brian Moynihan, the CEO of Bank of America, recently shared his vision for a cashless society while speaking at the Brainstorm Finance Conference by Fortune.
Digital money is the future
Moynihan lauded and acknowledged the idea of digital money and said that Bank of America has “more to gain than anybody” as trends indicate a growing preference for non-cash transactions. He said, “We want a cashless society,” making a bold statement for digital transactions as the head of the second largest bank in the US.
He suggested that more than 50% of all money transactions are already non-cash transactions, i.e., they are being processed electronically. This is especially because of existing payments systems like Zelle and PayPal, digital wallets, and even cryptocurrencies. Moynihan says that the banking sector has “already digitized” and this business will continue to make a digital move. He also said that the industry has only started to figure out how to provide more value in digital transactions.
Cash is still the king
According to a San Francisco Federal Reserve Report published in 2018, cash was still the most frequently used instrument of payment. It represented about 30% of all transactions a whopping 55% of all transactions under $10. However, digital payment options like cryptocurrencies and electronic wallets from tech giants like Apple Pay and Google Pay are making it easier to make cashless transactions. Mobile banking is also becoming more popular, and consumers are using debit cards more regularly.
Some businesses and countries like Sweden have also pushed for a cashless future, disrupting the very need for hard currency and creating a better use case for digital payments. A 2018 study by BNP Paribas and Capgemini indicates that noncash transactions could grow at a compound annualized growth rate of 12.7% till 2021. Financial intermediaries processing these transactions will be vastly benefitted for processing these transactions.
Bank of America is also adopting emerging technologies like artificial intelligence. It already has a voice-activated virtual assistant application called Erica with 7 million customers. Moynihan noted that several emerging technologies, like machine learning, robotics, voice recognition, and artificial intelligence, applied to the banking industry.
He said that the bank had spent about $30 million in the past eight years to improve and develop its technological infrastructure further. It helps in reducing the size of the company and apply new technology to all procedures. The bank already has 27 million mobile customers and 37 million digital customers.
