Bank of America would have a major capacity problem if its customers ever stopped using mobile phones over security concerns, says CEO Brian Moynihan.
“I would have to put up 700 branches. They would have to hire 20,000 to 30,000 people to staff those branches. We just don’t have the capacity,” Moynihan told journalist Charlie Rose in a wide-ranging television interview that aired this week.
Like some other banks, Bank of America has been betting big on mobile phones as a more efficient way to serve its customers. The nation’s No. 2 bank by assets has been closing branches, even as it invests in new technology to serve customers increasingly using computers, smartphones and other devices to conduct their transactions.
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The move has helped the bank cut expenses at a time when low interest rates make lending less profitable. But the CEO’s comments also show how dependent the bank has become on the new technology.
Moynihan, who also sat down for an interview with Rose in 2013, said the volume of checks being deposited on Bank of America’s mobile platform alone is equivalent to what would normally be handled by nearly 700 branches.
“That is like the 20th-largest bank in the country, sitting there,” he said.
Since Moynihan took over in 2010, Bank of America has shed about 1,200 branches, including in the Charlotte metro area. Last month, Bank of America’s co-head of consumer banking said it will continue to trim branches as it remains focused on lowering its overall expenses.
While reducing branches, banks have been pumping more money into mobile technology to remain competitive with one another and a rising number of financial services start-ups. Moynihan said Bank of America has spent about $700 million in mobile technology over the past five years.
Moynihan, reiterating remarks he’s made before, said the bank is spending as much as it has to in order to protect customers’ data from hackers.
“Do you feel like you are under assault every day?” Rose asked.
“If you put it in a war terminology maybe,” Moynihan said. “We just have to be absolutely vigilant, and you have to be vigilant on multiple dimensions – you know, outside attacks, inside attacks, employees doing stupid stuff and exposing the company.”
He added: “So knock on wood we continue to do a pretty good job.”