Bank of America CEO on India strategy and what makes it an attractive investment destination

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Bank of America CEO on India strategy and what makes it an attractive investment destination
Bank of America CEO Brian Moynihan believes India presents strong growth opportunities for the bank, driven by its rapidly expanding economy, digital advancements, and robust domestic market.

Discussing India’s position as the world’s fifth-largest economy, Moynihan highlighted the effectiveness of government policies. He also pointed out India’s growing energy independence, which he believes is crucial in mitigating risks from global oil price volatility.

“Your country has done a good job of creating energy security through renewables… It puts [India] on a course to be less susceptible to importing inflation from gas price spikes or oil price spikes, which is important,” he explained in an interview with CNBC-TV18 at the World Economic Forum (WEF) in Davos.

Bank of America operates in India through its corporate investment banking, lending, and treasury services business, in addition to its extensive global back-office operations.

These are the verbatim excerpts of the interview.

Q: This is going to be your 80th year for Bank of America in India, it is a significant milestone. How’s India looking to you at this point in time, and specifically from a Bank of America point of view, what’s the plan?

A: If you think about India, we have been growing strong next year, consistent with what they grew this year. It’s now moved to the fifth largest economy. Keeps moving north with all the programs of Prime Minister Modi and the governments, over the years, have been working. It’s becoming hugely digitally 800 million phones and all the stuff we talk about, and you see the digital impacts with our clients and our customers. Our business there is really two things – one is a corporate investment bank, trading, underwriting and debt advice, etc, and corporate lending and treasury services. And the second business is, we have a big back office for the world out there, and about 20,000 teammates. We have had that for a long time and so that business, it is great. It shows the world that you can continue to develop what that business was 30 years ago, probably when I first became familiar with to now is much different and much different types of people and huge campuses with schools and everything we do. So that’s a good thing, and it will be a great backbone.

Other people see that opportunity, which is the talent in India, the education, the ability to get lots of engineers quickly and those things is great. When you go to the core business we are very enthusiastic about India. We expect the economy to grow. We expect our business grow with it. Kaku Nakhate and the team do a great job, and we just expect that to continue.

Interesting, the one in the middle is we have invested a lot in the treasury services for the real time payments and things and I think this is an area that we all got to be careful around the world. We are dividing up the data of our customers into little, tiny pieces, and that’s not efficient for multinationals. I think one of the things that we try to talk to the European regulators, or the Indian regulators, the Brazilian regulators, is wait this idea of taking information from multinational companies and try to put it in little boxes has cost you a lot, and is it really going to provide a great service? Do you want those flows of capital, you want that multinational to be able to move money in to support growth and then move it back out when it needs somewhere else, because that makes it a better proposition? If its money goes in and get stuck, or data gets stuck so we are trying to help get that balance right, but it is a great business we expect to grow.

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Q: What you expect, in terms of fund flows into markets like India, on the back of what we are seeing happen in the US with the dollar strength?

A: I think the fund flows in India ought to be among the strongest around the world, because it’s sheer opportunity. Manufacturing as an extra source, the services economy, which is strong, and by the way, it’s building a huge internal economy and that’s one of the tricks for an economy to really get big and sustain is to have that internalisation economy, that consumption based economy. As the GDP per capita keeps moving up, and the people have borrowed a little bit more money to buy cars and things that are more capital intensive, but that’s all going and that’s good stuff. We believe the country has good prospects, therefore money will flow towards it, because what people want to invest in is where they can see growth, where they can see profit, where they can see opportunity, and that’s your country is one of the places that people see it around the world.

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Q: Let us talk about the transformational impact as well as the disruptive impacts. What are you seeing within the business? What is the take on agentic AI, which seems to be the buzz word here. How are you incorporating that into your business?

A: We think about AI across multiple dimensions, and we have been at it for a long time. We have a virtual assistant, and have had it for a long time called Erica, 20 million people use it every day. And now we have taken that technology, which was in a parlance of today, but nobody would have called it that back then, 10 years ago, we built the models with some people. It is a natural language processing model, but it would be a small language model, in other words, more deep, more tailored to financial services, more relevant with our understandings in it and our training in it that now has been used for, like our technology support for our teammates.

About half the calls that would have gone to a human being to interface with teammate, to change a password, order a piece of equipment, all are handed by the agent, the bot, so to speak. And then we put it into our cash pro to our institutional payments, and it’s used heavily. Then we put it into our ability to do credit offering memorandums and the things, so we are seeing that technology go through. We think this is very approval.

In the coding space we are getting about 10 to 15% we got 1,000 1,500 coders using it today, and we are picking that number up as we train them and how to use it. They still have to check it. We still have to have a human between it and deployment, because you can’t sit there and say, Oh, the model made me do it. What’s going to happen so we keep doing, we think it has high possibilities. But in a financial services regulated in a business which holds the experience of 60 million consumers and 100s of 1000s of millions of businesses in its hands every day, you have to make sure it really works and that’s our experience of the last several years.

Q: Crypto currencies, and that has been the big bet for President Trump. He has been vocal about it, and we are waiting to see what actions the regime will finally take on cryptocurrency. I don’t know if you have seen what’s happened to the meme coin overnight, the Trump meme coin, do you believe that this is going to be an inflection moment now, how the banking industry looks at crypto currencies?

A: This goes back to the regulatory confusion so not only in our country, but around the world, there has always been this sort of we would like to go on, but you can’t do it because we don’t think you should. In the end of day, banks send all their money digitally today, in terms of dollar volume, so $3 trillion will go out of Bank of America next 24 hours digitally. It’s not like an idea of sending money digitally, in digital form, transfers as anything at all. If you think about that, we also believe in the blockchain. We are still trying to figure out how to work so that we got that. So real question is, if it’s a stable coin, type of dollar backed, it’s like a money market fund, 100% can’t break the buck and all those things and we know where those assets are, and we can drive those assets, and our consumers actually want to use it we think there’s value there.

At some point, if it becomes okayed by the regulators, so you can do it, and it’s okayed in terms of who is holding the money that we do it, and okayed in terms of the attribution of who is moving the money, then we can engage in it heavily. You will see bank coins and all this stuff for the commerce part of it for the actual payment part of it. The investment part, I will let better experts talk to you about that, because any other day, the money can move infinitely. Today, digitally, this will be another form so if somebody, instead of using a credit card and somewhere up in the mountains here in Switzerland, they can pay by a stable coin, so be it. That’s just another way money moves.

Q: If the regulatory clarity emerges, are you ready?

A: We been studying for years. It’s just not clear what you can do, and we can’t do it through people who can’t have the attribution to the customer level we have to have, we have to know our customers customer and that’s a difficult thing. What we did to helping that in the banking industry, a different type of form of payment in US was Zelle. So we said, we will form one thing, that the network of payees and payors are all bank customers so we can, we can rely on JPMorgan or Citi having done the work of that customer with money around. And so I think there will be ideas like that form as time goes on.

For full interview, watch accompanying video

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