Banking

5G, not digital currency: What BofA tech chief Bessant is bullish on

5G mobile networks and 3D printing are the technologies of the future, according to Bank of America’s Cathy Bessant.

Her comments command attention because, as the chief technology and operations officer at BofA, Bessant manages a $14 billion annual tech budget — $3 billion of which is dedicated to new and emerging technologies.

She readily acknowledged her choices might surprise people.

“We believe distributed-ledger technology, the technology that underpins much of the discussion around digital currency and digital exchanges is a new and exciting technology,” says Cathy Bessant, chief technology and operations officer at Bank of America. “We have yet to find a solid use case for it in financial services.”

“This is the point where everyone wants to hear me say blockchain or digital currency, and I’m not going to say either of those things,” Bessant replied when asked Monday during a virtual event hosted by Bank of America about which technologies excite her the most. “We believe distributed-ledger technology, the technology that underpins much of the discussion around digital currency and digital exchanges, is a new and exciting technology. We have yet to find a solid use case for it in financial services.”

Instead, her picks have a more practical bent.

3D printing, which is also known as 3D manufacturing or distributed manufacturing, allows objects to be churned out by local, specialized printers rather than in a distant factory. Social distancing during the pandemic has made the ability to push designs to a remote location more valuable.

“This is one of the most important things that we as financial institutions have to think about in a much more entrepreneurial way,” Bessant said. “If I can’t get people into a mail center to mail out credit cards, do I have a way to only print those credit cards in a way that’s accessible on a retail basis? If there’s a sudden need for a human to have a book of checks, is there another way to think about printing on a distributed basis differently?”

The technology will be important to the business model of the future, she said.

The second technology Bessant is hopeful about is 5G, a mobile network standard that could allow for higher data bandwidth in some scenarios.

“It’s not new, but the execution of it at scale in the U.S. will be new,” Bessant said. “We’ve all seen the challenges of bandwidth in our own households; we have seen the successes and failures of software that requires wide bandwidth.”

Bessant also said that many countries are ahead of the U.S. in deployment of 5G networks.

She acknowledged that COVID-19 has made long-term innovation difficult for BofA, because its forced her team to constantly focus on the problems at hand.

“In an environment like this, and particularly in a work-from-home setting, we can be very good at attacking the tactical, getting new capabilities out, connecting a new way, the things that are right in front of us,” she said. “The reason that I’m hoping and believe that 2021 will give us an opportunity for a lot more co-location is that the natural creativity transformation we can make five to 10 years down the road.”

David Reilly, chief information officer for global banking and markets at Bank of America, chose 5G and data analytics as the most promising technologies of the future.

“Data continues to be the largest untapped resource in companies like ours,” Reilly said. “We don’t lack for information. It’s drawing insight from all of that information that we see the opportunity to better serve our clients. Some of the advances in differential privacy, where you can surveil much larger data sets and draw insights while protecting individuals’ privacy, open up different opportunities.”

“It’s one of those moments where you make the big company small, because your insights become extremely micro and extremely local for the client that you’re dealing with,” Reilly said. “And if we can pull that off, that moment of engagement feels special to the client.”



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