From October 21st to 24th, Sibos 2024 will be held in Beijing, with multiple globally systemically important financial institutions including Bank of America participating. During the conference, Wang Wei, CEO of Bank of America China, gave an exclusive interview to 21st Century Business Herald.
Wang Wei stated that Bank of America spends $12 billion annually on technology. In 2024, nearly 4 billion US dollars will be allocated for new technological measures. In addition, Bank of America refers to it as' responsible growth ', which means that it ensures the responsible deployment of technology to support the growth of customers and the company.
Wang Wei also mentioned that customers are paying unprecedented attention to mobile applications, which has led to the rapid development of the Bank of America CashPro platform. Therefore, Wang Wei is most concerned about three topics at the Sibos annual meeting: mobile banking, data, and APIs. Now, we can analyze data on behalf of clients to alleviate their burden, help them reduce the time employees spend in manual processes, and find more effective ways to utilize cash, payments, or working capital, "said Wang Wei.
New technologies and 'responsible growth'
21st Century: First, please briefly introduce the current business layout and operation of Bank of America in the Chinese market.
Wang Wei: Bank of America has eight business lines, mainly two in China, namely global market business and corporate and commercial banking services. We can provide customers with diverse products and services. Our service targets include three different types of customers: corporate clients, institutional clients, and subsidiaries of multinational corporations. What I really want to emphasize is that digital banking is Bank of America's strength. We can provide innovative solutions for customers, making it easier for them to conduct business more safely, quickly, and intelligently.
21st Century: In the current Chinese market, which business lines are important or are the focus of expansion? Why? What are the advantages of Bank of America?
Wang Wei: It is currently the Sibos period, and I would like to focus on sharing our Global Payments Solutions (GPS) business. Bank of America's annual revenue is about $100 billion, and the GPS business's annual revenue is about $11.4 billion, which accounts for a relatively large proportion. We use digital means to enhance the depth and breadth of our solutions, and our cooperation with customers is becoming increasingly close. Customers can use our digital solutions to achieve the transition from paper to digital. This is also an important characteristic in our development.
For example, we have three "fist" products. This includes an electronic tax payment solution through the Treasury Information Processing System (TIPS), a more comprehensive paperless solution for cross-border transactions through a single window platform, and a new bill system from the Shanghai Bill Exchange (SHCPE). These three products can help customers achieve financial operations and risk management, and are also the focus of our future development.
21st Century: In recent years, China's banking industry has maintained high investment in digital transformation, especially large commercial banks. What other possible development directions do you think are for the digital transformation of commercial banks in the future?
Wang Wei: China's large commercial banks have made a lot of investment and contributions in digitalization, and the degree of digitalization is very high. I will mainly introduce the measures taken by Bank of America in this regard.
Firstly, we have nearly 60 million customers utilizing Bank of America's digital capabilities to help manage their cross business line finances, with a record 8.6 billion login attempts last year alone. This is thanks to some of the work we started ten years ago. We build a shared platform and infrastructure that integrates company data and emerging technologies to improve our services, go public speed, and data accuracy, while reducing customer risks and costs.
Bank of America spends $12 billion annually on technology. In 2024, nearly 4 billion US dollars will be allocated for new technological measures. Over the past decade, Bank of America has spent $32 billion on new technological initiatives, including investments in enhancing artificial intelligence tools for our clients and advisors.
One of the direct results of these investments is that Bank of America currently has approximately 6600 granted and pending patents covering key areas such as information security, artificial intelligence, machine learning, online and mobile banking, payments, data analytics, and augmented and virtual reality. We call it 'responsible growth', which ensures that technology is deployed in a thoughtful and responsible manner to support the growth of our customers and company. This is also reflected in Bank of America's operations in China.
Bank of America's banking platform CashPro is currently used by over 40000 corporate and commercial customers worldwide, and is also being applied in China. I would like to give two examples here. One is CashPro Chat, which now provides what we call "intelligent advisor routing", an artificial intelligence feature that can quickly identify complex requests and route customers to human experts when needed. Another good example is CashPro's Intelligent Accounts Receivable (IREC), which is an accounts receivable matching solution driven by artificial intelligence and machine learning. It can collect incoming payment information and related remittance details from various payment channels and sources, and then match these payments with outstanding invoices. This solution has covered all 12 Asia Pacific markets where Bank of America operates.
21st Century: What other emerging technologies will have a profound impact on the banking industry?
Wang Wei: If we look back at the development of the technology field in the past two to three decades, we can know that what really matters is not the specific technological means, but how to utilize these technologies and how to make consumers and customers use them. Therefore, I believe that what is more important now is how to win at scale and further improve customer experience when using relevant technologies.
Nowadays, everyone hopes to control everything through their mobile phones, whether it's forex trading or transferring money. But in reality, for everyone at the Sibos annual meeting, banks still have a long way to go to improve efficiency through technology.
Bill Gates once said, 'We always overestimate the changes that will happen in the next two years and underestimate the changes that will happen in the next ten years.'. I think the future challenge is still how to use technology. Therefore, it largely depends on how it is implemented within the bank and in its ports with other customers and banks, rather than choosing a certain solution.
Pay attention to mobile applications, data, and APIs
21st Century: Recently, the Chinese banking industry has paid high attention to the topic of stable operation in a low interest rate environment. What advice do you have for experiencing many ups and downs in the financial market during your career?
Wang Wei: Indeed, the low interest rate environment poses a challenge for domestic banks to reduce their net interest margin. If we talk about stable operation, I think we should focus on three aspects.
The first is liquidity management, which ensures sufficient liquidity to meet short-term and long-term needs, retains sufficient cash reserves to meet working capital requirements, manages cash balances, and optimizes returns. The second is risk management. Interest rate and exchange rate fluctuations pose great challenges to the operation of enterprises, and hedging strategies should be developed when necessary to manage exchange rate increases and interest rate fluctuations. The third is the optimization of working capital, which requires the implementation of a system to achieve real-time visibility of cash flows for all accounts, currencies, and subsidiaries. This aspect is particularly important in a dynamic interest environment.
During Sibos, Bank of America introduced a guaranteed exchange rate with a maximum term of 1 year, which is currently the longest term in the industry. Aiming to simplify the foreign exchange risk management related to cross currency payments and receipts, Bank of America's clients can obtain exchange rate certainty by locking in the foreign exchange rate within the agreed period and utilizing the guaranteed exchange rate.
21st Century: What topics are you particularly interested in and why are you attending Sibos this time?
Wang Wei: One of the themes is the stickiness of mobile applications. Our customers hope to be able to use mobile devices flexibly and universally, and the development momentum of the Bank of America CashPro App has proven this.
The second theme is data. Our banking platform CashPro generates a large amount of data. Now, we can analyze data on behalf of clients to alleviate their burden, help them reduce the time employees spend in manual processes, and find more effective ways to utilize cash, payments, or working capital.
The third is the application programming interface (API). Due to the company's need to meet the requirements of real-time data and communication, the demand for APIs is rapidly growing.
21st Century: At this conference, there is a topic called "Empowering Women to Lead". I believe you are an outstanding female leader. What other suggestions do you have in this regard?
Wang Wei: This has always been a topic of special concern to us, and it is even more crucial for the future of our industry. Before Sibos, we held a banking ladies' dinner to establish connections and strengthen learning with peers and clients. We also shared a lot during the meeting.
I have been working at Bank of America for 22 years, and in my opinion, it has provided me with many opportunities to try different roles and learn different knowledge in the process. The company provides many opportunities for female employees, and the company's leaders actively explore the advantages of women and encourage them to make more contributions. In the meantime, we can feel that Bank of America focuses on women's career development, which is very important.
In addition, the role of "mentoring" is to help women do better in their careers through inheritance. This time, Bank of America employees have also been selected as Sibos Talent Accelerator Route (STAR) scholars, which mainly recognizes outstanding women in the industry and provides them with a platform for research and learning. Cultivating a new generation, I believe this is also very important.