Enhancing Rewards with AI

To leverage its strong presence in U.S. payments, Bank of America is redefining its credit card offerings to boost profitability. At the heart of this transformation is artificial intelligence (AI), designed to attract new customers and deepen relationships with existing ones.

Tailored Incentives for High-Rolling Customers

The revamped program aims to offer personalized rewards based on higher account balances, a tactic commonly used by credit card providers. This approach aligns with Bank of America’s strategy to expand and strengthen its customer management tools.

According to Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, “Bank of America’s move to integrate rewards with banking relationships is well-timed. It targets premium cardholders while ensuring the issuer can benefit from a more robust customer base.”

Capitalizing on High Interest Rates

The current climate of high inflation and interest rates has propelled consumers toward credit cards, driving up balances. Issuers like Bank of America are taking advantage by tightening lending standards and prioritizing stable customers.

Personalized Offers via AI

Using AI to gather deeper insights about potential customers, the bank plans to deliver personalized offers during significant life events such as marriage or buying a home. This strategy not only boosts customer engagement but also enhances individual underwriting processes.

Ambitious Growth Targets

Bank of America aims to grow its customer base from 69 million to 75 million within four years. To achieve this, the bank is focusing on leveraging AI for comprehensive customer management and offering tailored incentives.

Ultimately, Bank of America seeks to raise consumer unit profits to $20 billion, a goal that has only been met twice in U.S. banking history.