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AI drives BoA’s global payment solutions
Innovative tech transforms landscape while maintaining core financial stability
Tom King 14 May 2024

Post-pandemic, the global payments landscape has witnessed major transformation and innovation, with technology, including artificial intelligence (AI), creating significant advances that have seen local and global payments becoming faster without foregoing their core financial stability.

London-based Matthew Davies, head of global payments solutions for international markets at Bank of America (BoA), met with The Asset on a recent business trip to Singapore.

Davies took time to elucidate on his firm’s progress in global treasury management, global payment systems, digital payments, AI, and the evolving landscape of customer expectations in international money transfers in Asia and beyond.

TA: Real-time payments are arguably the biggest theme in the transaction banking sector. How far has the transition happened in this area and what’s lined up next? 

MD: It is an evolving space in the Asian markets. Real-time payments started in the consumer space and have been around since 2018. From a corporate treasury perspective, it doesn’t matter what payment instrument they use, they would prefer payments to come in on time.

Real-time payments can collect receivables across supply chains instantly and help corporates to not only manage their days sales outstanding, but also manage credit and risk – in particular, in the FMCG [fast-moving consumer goods] industry where they sell to all sizes of retailers.

While real-time payments have been launched across most of the markets for domestic payments, the next phase will transcend it further to enable cross-border payments.  It is an interesting space that we should all closely watch.

TA: We continue to see supply-chain diversification into Southeast Asia. Is BoA following this trend with treasury offerings?

MD: We are certainly seeing a shift in supply chains, which is mainly driven by the focus on resiliency and setting up various contingencies, whether it’s for geopolitical reasons, the pandemic or disruptions to shipping channels.

As clients look to diversify their supply chains, they tend to rely on the support of banks to help with local knowledge and expertise. We not only have a long history of being present in many of these markets, but we also understand our clients’ priorities and how they would like to operate.

Although optimistic about the future, more than ever, companies are navigating in uncertain times, and we’re well positioned to be a partner of choice for our clients.

TA: The late Charlie Munger of Berkshire Hathaway said: “I am personally sceptical of some of the hype that is going into artificial intelligence. I think old-fashioned intelligence works well.” Can you elucidate what BoA is doing with AI in the global payment’s solutions space?

MD: We have launched several products and services in the AI space. Some of these include:

  • Intelligent Receivables: With thousands of payments coming in, it is difficult for clients to reconcile the invoices and match them accordingly. The solution leverages machine learning and AI to produce higher straight-through reconciliation rates, no matter how our clients’ business receives funds.
  • CashPro Forecasting: The bank analyses the data at its disposal across all receivables, payables and cash positions across multiple currencies with multiple banks globally. Our CashPro Forecasting tool provides forecasting based on the global data and analytics performed, leveraging AI. It also supplements and complements the forecasting techniques that clients do themselves internally.
  • CashPro Chat: BoA has elevated the experience of its business clients through enhancements to CashPro Chat, a virtual service adviser within the CashPro banking platform. CashPro Chat now includes the same proprietary artificial intelligence (AI) and machine learning capabilities behind Erica – the company’s popular virtual financial assistant that’s been used by more than 38 million individuals to access account information, transfer funds, send money to friends and family, and more. Business clients can now experience the power of this advanced virtual assistant to quickly view transactions, find information about their accounts and navigate CashPro functionality. As needed, the virtual adviser will route more complex requests to specialized service teams to resolve.

TA: Is there a BoA treasury/payment innovation lab and have any innovations been brought into everyday use from that entity?

MD: We believe innovation comes from the business, and it’s the responsibility of each employee to be a driving force of innovation, so our innovation strategy and execution is all about finding a solution to a need/problem for both today and the future.

Our approach to innovation is therefore focused on continuous improvement that results in a combination of enhanced client experience, operational excellence or business efficiencies – ideally, all of these.

That would mean any incremental value accretion is innovation and is a way of life, rather than only focusing on big launches of a new product or solution.

BoA spends US$12 billion on technology each year, of which US$3.8 billion is on new technology.

We look at patents as a success indicator of our innovation culture. Last year, we recorded 6,600 patents (granted and pending), up 13% year-on-year and up 17% since 2019. The number of our patent grants last year moved us from the 75th to 64th position on the Intellectual Property Owners Association’s Top 300 List.

Another initiative is to foster innovation as part of contributing to the community through our Social-Economic Activity Council (SEAC).  As part of the SEAC, we launched the Breakthrough Lab in 2021, and it has already won a Well Financial Innovation Lab award over the last two years.

This project is focused on providing business opportunities to entrepreneurs from diverse and underrepresented communities. It originally launched in the US, then expanded into Europe, before opening in Asia last year.

TA: In terms of regions, is there more expansion or acquisitions in the pipeline for BoA in Asia-Pacific?

MD: We have been present in the region for over 75 years, and we continue to expand our client coverage by offering world-class products and services.

Asia-Pacific is a fast-growing region for BoA, and we would like to go deeper and expand in the markets here.

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