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Payments for Good

E4e relief accelerates emergency payments.

E4E Relief is a Charlotte, NC-based nonprofit that’s at the forefront of helping to provide financial assistance to those affected by disaster. They partner with corporate clients to send aid payments to tens of thousands of employees annually, helping them when they need it most.

Recently, Bank of America helped E4E Relief embrace digital payments to help people get back on their feet faster.

Fast relief payments, powered by Zelle®

In 2017, E4E Relief disbursed 13,000 grants in just 16 weeks. Most payments were sent via ACH, which was slow and cumbersome for recipients while creating data-storage burdens for E4E Relief.

After 2017, E4E Relief began evaluating new ways to send aid payments faster. They chose Global Digital Disbursements from Bank of America, which uses Zelle®, a mobile payments network that enables money to be sent easily from one bank account in the U.S. to another. This has led to fast aid for recipients, plus significant cost savings and less administrative burden for E4E Relief.

Benefits of Global Digital Disbursements

Four-quadrant graphic with a header

Going top left to right:

• Fast payments
• Simple to use
• Broad reach
• No need to collect bank account info 1

What’s next for E4E Relief

Global Digital Disbursements has been transformative for E4E Relief and is helping them shape a faster, easier future. They are now exploring the ability to receive donations to PayPal® from accounts outside of the U.S.

Zelle and the Zelle-related marks are wholly owned by Early Warning Services, LLC and are used herein under license.

1 Once payment is sent and recipient is enrolled, funds can arrive as quickly as minutes or may take up to three business days. U.S. checking or savings account required to use Zelle®.

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Mobile solutions that help people and communities rebuild faster

Card and Comprehensive Payables

Harness the power of digital and the convenience of mobile to turn payables and travel spending into an advantage

Global Real-Time Payments (RTP)

Transact with greater speed and certainty, and 24/7 availability

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Bank of America > Keep the Change: Feeling in Control: Bank of America Helps Customers to “Keep the Change”

We differentiate between three editorial levels of stories:

1) Design thinking classics: Case studies that are well-documented and widely known, which we include in our collection for the sake of completeness. If not stated otherwise there are compiled by our editors via desk research.

2) Normal cases: Stories, which are less known and got collected and rewritten by our editors via desk research.

3) Stories with validated data: These cases are based on first-hand empirical information that our editors received during their research.

How do you encourage new customers to open bank accounts? In 2004, Bank of America assigned design agency IDEO to boost their enrollment numbers: a problem lacking any user perspective or problem (yet).

The bank hoped to bring a human-centered angle to an industry which is hardly known for innovation. They were especially interested in the customer segment of boomer-age women with children. To conduct the ethnographic research, a team of five BoA employees partnered up with four agency designers. In their user research, the group conducted interviews and observed families in Atlanta, Baltimore, and San Francisco. According to IDEO designer Sally Madsen , the team was “ talking to people who were great at saving, and people who struggled with it, taking inspiration from some of the existing, every-day habits people have around savings “. They observed a dozen families, and followed mothers around when they went shopping or dining. Soon, they realized an interesting pattern: In many families, mothers were in charge of managing finances. An extreme group in this pattern turned out to be single mothers: They are often on a tight budget and have to keep track of their spending meticulously.

Many single mothers kept checkbook registries, in which they listed their bills, expenses and ATM withdrawals.

Many of these women kept checkbook registries, in which they listed their bills, expenses and ATM withdrawals. In the beginning of the 2000s, this was a common way to manage money – a time before banking apps and online banking was widespread. When the design researchers looked at the checkbook of a woman in Atlanta, they realized that she rounded up numbers: Instead of listing 22,73 dollar for a refueling bill, she listed 23 dollars, for example. This simplified calculations, but it also added a little buffer each month – at the end, a few unexpected dollars were left over for her. A second, important realization concerned the inability of mothers to save. Some of them simply did not have enough money to put anything aside, others could not control their impulse buying. The researchers realized that this behavior revealed an unaddressed need in banking, and offered the opportunity to create value for customers and the bank.

Keep the Change

Two Bank of America Vice Presidents, Faith Tucker and Ray Chinn, assembled a team of product managers, finance experts, software engineers, and operation experts for brainstorming. The team held 20 sessions and generated 80 product concepts. They favored one idea: the “Keep the Change” program. “Keep the Change” is a service that automatically rounds up all purchases made with a debit card. These rounded up cents are transferred to a savings account.

To test a prototype of the idea, the team created a cartoon video displaying the rounding up service and tested it in an online survey with 1600 participants. After an extremely positive response, “Keep the Change” was pitched to the consumer division and got approved. In an iteration of the idea, the product development team added three features, as a Bloomberg case study describes: Firstly, a summary of the rounded-up transactions in the account; secondly, a feature preventing a rounding-up transfer from pushing the user’s account into overdraft; and thirdly, a promotion. As a treat, Bank of America matches the saving at 100 per cent for the first three months up to a certain amount.

In a major marketing campaign, Bank of America put a 6 meter couch in New York’s Grand Central Terminal, hiding coins in the furniture. Passengers were invited to look for the change.

The “Keep the Change” service turned out to be a huge success for Bank of America. After its launch in September 2005, the program attracted 2 million customers in less than a year. Since then, more than 12 million customers signed up for the program and saved more than 2 billion dollars in total. 60% of all new customers enroll for “Keep the Change”. 99% of customers who signed up for the program stayed with it.

Closely observing user behavior and interpreting their workarounds was a crucial step leading to this successful outcome: “ People couldn’t tell us that they wanted a debit card that would ‘keep the change.’ It didn’t occur to them “, IDEO CEO Tim Brown said in a Forbes interview . “ But we saw how many people were rounding up to the next dollar when they paid for things. ” He describes that the success of this innovation lies “ in its appeal to an instinctive desire we have to put money aside in a painless and invisible way ” in his 2008 Harvard Business Review article . According to Sally Madsen , the Keep the Change program “ meets Bank of America’s goal of generating more business for their savings programs, but it’s also something that meets a core basic need that people have, which is finding ways to manage their financial security .”

Bank of America’ former Senior Vice President and product developer Faith Tucker underlined the feeling of empowerment for Bank of America customers in a designbetter interview : “ There was an almost unexpected and very emotional effect from this new service. People who previously never had savings suddenly did. And it wasn’t the amount that mattered; even a small amount of money in their savings account gave them a sense of power and control over their finances. ”

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Image Sources

• boa_image: rawpixel | CC BY 4.0
• boa_preview: Michael Longmire/Unsplash | CC BY 4.0

The Authors

Karen von schmieden, please rate this.

Was this story informative?

Did you learn something new or surprising?

How good is the writing style of the author?

July 24, 2019

best practice

May 11, 2020

Good approach!

July 8, 2020

So customers saved on average $10 a year. Besides PR, I don’t see much gain here. Smoke and mirrors.

Trackbacks/Pingbacks

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• Design Thinking: 54 How Might We Examples - Design Ideas - […] How do you encourage new custo…

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#Name-of-Case uses Design Thinking

1 At the periphery (e.g. via booking agencies or conducting workshops).

2 In parts of the organisation (e.g. the Ux department, R&D or marketing).

Corporate Facts

Bank of America

The Bank of America (BoA) is an American multinational investment bank. It is the second largest banking institution in the United States. More than 200.000 employees work for BoA, in 2017 it created revenue of more than 87 billion dollar.

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• BOA “Keep the Change” Program

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Bank of America: Playing the Long Game

Discover how Bank of America’s decade-long commitment to Responsible Growth has yielded promising results for the business and consumer financial health.

By MK Falgout , Zaan Pirani

• Program: Business Impact Initiative
• Category: Financial Services

A Strategic Shift to Build a Client-Centered Business

When Brian Moynihan became CEO of Bank of America on January 1, 2010, both the economy and the bank were struggling in the wake of the Great Recession. In response, Bank of America committed to a new purpose rooted in Responsible Growth: “Help make financial lives better through the power of every connection.” This became the guiding tenet behind a larger enterprise shift focused on measuring business success and considering how the bank lived its purpose.

To execute its new Responsible Growth strategy, the consumer bank focused on: 

• Building a client-centered business that leverages continuous client feedback and industry best practices
• Redefining its physical presence in underserved communities
• Offering simple, affordable, transparent financial products and services that deepen client engagement with the bank 

This case study explores how one of the nation’s largest banks leveraged its physical locations, optimized its suite of products, and deepened customer engagement to align and grow both the business and its impact on financial health.

What You’ll Learn

Explore how Bank of America deployed an enterprise-wide strategy that aligned business and client success. 

Dig into the role of Bank of America’s internal culture as a driver for change

Understand how customer listening influenced the bank’s support for underserved communities

Learn how Bank of America shifted its  approach to overdraft services

Read the Case Study

Data Spotlight

Bank of America’s Responsible Growth strategy has led to positive results for both customers and the bank.

$15 billion

saved by 6.6 million customers through the bank’s Keep the Change® program 1

decrease in net charge-offs from 2015 - 2022 2

36.7 million

Customer checking accounts by end of 2023, a new bank record 3

Our Supporter

We’d like to thank Bank of America for the financial support and insights required to make this report possible.

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Financial technology company Jack Henry™ partnered with the Financial Health Network to help financial institutions and their accountholders alike break down barriers to financial health.

BECU: Leading With Data To Advance Financial Health

BECU’s journey to improve member financial health led to a new strategy, an increase in data-driven initiatives, and positive outcomes for its members.

• Statistics sourced directly from Bank of America’s internal data.
•  Authors’ calculations using data in “ Bank of America Annual Report 2022, ” Bank of America, March 2023.
• “ Bank of America Annual Report 2023, ” Bank of America, March 2024.

Explore the trends. Discover new insights. Build stronger strategies.

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Bank of America’s Erica Tops 1 Billion Client Interactions, Now Nearly 1.5 Million Per Day

October 12, 2022 at 8:57 AM Eastern

Since launching in 2018, Erica® has helped nearly 32 million Bank of America clients manage their financial lives

Erica, the most advanced and first widely available virtual financial assistant, has surpassed 1 billion interactions with Bank of America clients. The award-winning technology, powered by artificial intelligence (AI), officially launched in 2018 and has since helped nearly 32 million clients with their everyday financial needs.

Since its launch, Erica has expanded to include new features and functionality:

• Clients viewed 37 million proactive insights to help them review their finances and cut recurring subscription charges that may have increased unexpectedly, know when they’ve received a merchant refund, or have duplicate charges.
• More than 4 million proactive notifications about eligibility for Preferred Rewards have helped clients enroll in the program and enjoy the benefits.
• 60 million Spend Path insights have helped clients understand their finances with a weekly snapshot of spending.
• More than 98% of clients get the answers they need using Erica. In September 2022, the bank launched Mobile Servicing Chat by Erica to connect clients for a live chat with representatives to answer more complex servicing questions, with more than 170,000 chats having already taken place
• Coming in the first half of 2023, Erica will connect clients to financial specialists when they have questions about new products and services, such as a mortgage, credit card or deposit account.

As Erica’s capabilities have grown, so has its ability to help clients across their entire banking, lending and investing relationship with Bank of America, including Merrill Edge, Bank of America Private Bank and Benefits Online. Erica also supports Merrill clients through insights on portfolio performance, trading, investment balances, quotes and holdings and can help connect clients to a Merrill advisor. Additionally, bankers who support business clients at Bank of America use BankerAssist, an AI virtual assistant leveraging the underlying technology of Erica, to identify and close new opportunities, manage exposure and use real-time data to further client conversations.

Image Description

Erica Over the Years Timeline

• June 2018 – Erica launches
• July 2018 – Erica surpasses 2 M users
• October 2018 – Erica proactive insights launch
• November 2018 – Erica surpasses 4 M users
• May 2019 – Erica handles 50 M client requests
• October 2019 – New mobile app includes Erica updates
• December 2019 – Erica surpasses 10 M users
• March 2020 – Erica learns over 60,000 Coronavirus-related terms
• August 2020 – Integration with Merrill
• October 2020 – BankerAssist launch
• August 2021 – 430 M interactions; 21 M clients
• October 2022 – 1 B interactions; Averaging 1.5 million interactions per day ; 32 M clients

Bank of America logo

Download the Bank of America app or visit  bankofamerica.com .

Bank of America

Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 4,000 retail financial centers, approximately 16,000  ATMs  and award-winning digital banking with approximately 55 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock ( NYSE: BAC ) is listed on the New York Stock Exchange.

For more Bank of America news, including dividend announcements and other important information,  register for news email alerts .

Bank of America, Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Reporters May Contact:

Andy Aldridge, Bank of America Phone: 1.980.387.0514 [email protected]

• Global Wealth and Investment Management
• Small Business, Business and Commercial Banking

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Training Industry

How bank of america deployed and scaled vr to advance workplace learning: a case study.

The ultimate goal of professional development is to create engaging and memorable training content that employees retain in their day-to-day jobs. For years, the corporate training industry leaned on tried-and-true methods like lectures, demonstrations and eLearning, but the key question persisted: How much information are employees retaining?

Enter virtual reality (VR) training.

VR training burst onto the scene in recent years — and with good reason. According to Dr. Narendra Kini, chief executive officer at Miami Children’s Health System, VR training can lead to an 80% information retention rate for one full year after training, compared to a 20% information retention rate for traditional training. Companies see the technology as an innovative, immersive way to provide meaningful and memorable training to strengthen professional development. Some companies are starting to implement VR training as a tentpole training method seeing unique, game-changing benefits to employee education, growth and development.

One of those companies, Bank of America, first experimented with VR training through a pilot program from the bank’s award-winning internal onboarding, education and professional development organization, The Academy . Following the successful pilot, Bank of America became the first financial services firm to launch VR training in October 2021 to nearly 4,300 financial centers nationwide, reaching approximately 50,000 employees.

As companies consider leveraging VR training, here’s what Bank of America learned through the launch of a full-scale program:

Start Small

Starting with a 400-employee pilot in 2019 gave Bank of America the opportunity to test the waters and see what practices worked best through VR training – and what didn’t. As the pilot progressed, it was clear that there were a lot of positives from giving managers and employees the opportunity to train and develop skills to have complex and nuanced conversations with their clients and each other.

The feedback was overwhelmingly positive, as 97% of Bank of America teammates cited more confidence and effectiveness in their jobs and greater retention of training material. Overall, employees learned material four times faster than they did in traditional classroom settings.

A Lifelike Experience

As part of the VR training program, teammates can take advantage of five different VR simulations (a number that will increase in 2022) and practice a wide range of skills including strengthening and deepening relationships with clients, navigating difficult conversations, and listening and responding with empathy . The VR trainings can put the employee in a simulated financial center, where they virtually interact with co-workers and clients. The module prompts different scenarios and conversations in a lifelike virtual environment, and provides guidance based on an employee’s answers to each question.

Historically, these skills were taught through instructor-led discussions and web-based training. In VR, teammates can practice their day-to-day job functions in a realistic and interactive environment. These trainings are highly effective at helping employees build and retain new skills and better connect with clients in the real world. In addition, the simulator can gauge employee performance and help diagnose where the employee may need follow-up coaching or more practice. The result is a well-trained, effective employee.

Meaningful Benefits and Building Excitement

While the clear benefit to VR training is an effective and prepared employee, there are supplementary benefits that have manifested from the VR training program. Most importantly, Bank of America’s employees report feeling nearly three times as confident after the training, leading to a better experience for the employees, their teammates and their clients, which has led to increased client satisfaction rates.

In addition, there’s palpable buzz around VR training for employees, and the experience is enjoyable. 90% employees in the pilot found that VR training was an enjoyable experience, and some employees have even shared their positive training experiences with their families — not your typical dinner conversation.

Driving Success for the Future

It may seem like the future is here with a VR headset in every financial center at Bank of America, but it doesn’t stop there: With VR, Bank of America deepened training’s impact on the business, and we will continue to explore how to leverage this technology to help teammates succeed. As VR continues to evolve and develop, Bank of America remains committed to investing in people and dedicated to providing a full range of professional development tools powered by industry-leading innovation.

Register for the  Spring Training Industry Conference & Expo (TICE)   to hear Mike Wynn’s Session,” Using VR to Advance Employee Learning.” 

• #Bank of America
• #training simulations
• #virtual reality
• #VR training

Mike Wynn is a senior vice president and innovations design manager for The Academy at Bank of America. In this role, he is responsible for delivering innovations to increase synergies and reduce inconsistencies between individual learning programs offered by The Academy.

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Bank of America’s Takeover of Merrill Lynch

The Players:

• Bank of America:  Bank of America Corporation is a bank holding and financial holding company. Its primary headquarters are located in Charlotte, North Carolina. Brian Moynihan is the current CEO, while Charles Holliday serves as chairman. Bank of America operates in 32 states, the District of Columbia, and more than 30 countries internationally. Bank of America functions through the “banks” in which they provide a variety of banking and non-banking financial services and products. As per 2011 financials, the shareholder’s equity was $232.50 billion.
• Ken Lewis:  In 2008, when Bank of America took over, Ken Lewis was Merrill Lynch’s chairman and CEO.
• Merrill Lynch & Co.:  Merrill Lynch was founded in 1914; it quickly became successful, specializing particularly in investment banking. The company continued to build its brokerage network and eventually became known as the “Thundering Herd.”
• John Thain:  He was chairman and CEO of Merrill Lynch and was in this position for about nine months when he made this weekend deal with Bank of America.
• The Securities and Exchange Commission (SEC):  The SEC is a federal agency that acts as the primary enforcer of federal securities laws and regulates the securities industry, the nation’s stock exchanges , and other electronic securities markets in the United States. The SEC has the authority to bring civil enforcement actions against individuals or companies alleged to have violated the securities law.
• Government and Economy of the United States of America:  From the government’s point of view, another major collapse of a Wall Street corporation would likely cause an enormous crisis in an already unstable financial climate. The overall economy of the United States was at risk; there were fears that a deep depression could result in untold damage to the citizens of the country. Even without total economic collapse, the taxpayers were certainly at risk in taking on the financial obligations of a failed Merrill Lynch.
• Board of Directors:  The Board of Directors of Bank of America and Merrill Lynch were directly affected by the decision of not being transparent to the public and shareholders. Also, the information that the voters did not receive from Ken Lewis and John Thain allowed the acquisition to take place in such economic turmoil.
• Shareholders:  Millions of shareholders of Bank of America would be affected by the decision and the consequences of an unfortunate takeover.
• Ben Bernanke:  He was the Federal Reserve chairman who, according to Lewis, insisted that he did not back out of the deal.

Instruments:

After 2001, the real estate boom accelerated. To service this market, Wall Street created a number of financial instruments. These instruments were a major cause for the decline of Merrill Lynch.

Collateralized Debt Obligations (CDO):  These instruments repackaged a pool of bonds , derivatives , and other instruments such as corporate bonds . The CDO derived its value from converting illiquid assets, such as buildings, into liquid financial instruments. A mortgage CDO bundled thousands of individual mortgages into a single bond, which was supposed to diversify default risk .

Mortgage-backed Securities:  These are a subset of CDOs. They were bundles of mortgages that were sold to Fannie Mae, which repackaged them to sell as stock to individual investors. This process enabled banks to take mortgages off their balance sheets.

Credit Default Swaps (CDS):  These were an insurance policy against the risk of investors, who bought them like bonds. A premium was paid to underwrite the risk of the various instruments like CDOs. CDSs lowered the cost of taking risks and created confidence in investors.

Risky Financial Instruments

In 2001, interest rates in the U.S. fell to low levels for several reasons. The environment of “cheap credit” encouraged investors and financial institutions to speculate in the real estate market, which increased property value and enticed household consumers to take additional debt. The Federal Reserve began to raise the interest rate incrementally in late 2004. By 2006, the subprime mortgage market began to appear vulnerable because of the increased interest rate. Holders of adjustable rate mortgages were required to make higher monthly payments than many could meet. The entire mortgage finance system, which was based on the assumption of ever-rising property value, began to unravel. Many rushed to sell their houses, which created further downward pressure on housing prices. This created a series of financial failures as CDOs dropped in value and banks lost their capital in defaults and withdrawals. In June 2007, two hedge funds managed by Bear Sterns suffered substantial losses and required huge capital injections from the bank, frightened investors, and investments bankers. These funds were heavily invested in high-risk, mortgage-backed securities and had been used to borrow more capital from the market.

BoA and Merrill Buy Damaging Assets

Countrywide Financials, which was America’s largest mortgage lender, had huge exposure in the subprime market. The company had approximately 900 offices and $200 billion in assets but was forced to draw down on its entire $11.5 billion credit line because of high exposure in the subprime market. Many regulators blamed Countrywide for helping fuel the housing bubble by offering loans to high-risk borrowers, so the company had very little hope of government help. Ken Lewis saw this as an opportunity to enhance the bank’s role in mortgage banking. Bank of America took a 16 percent stake in the company in August 2007, and there were hopes that this investment would bring some confidence in the market. But Countrywide’s stock collapsed, and Bank of America bought Countrywide with a total investment of $4.1billion.

Former Merrill Lynch CEO Stan O’Neal said that to generate higher returns, the firm would take on more risks. After entering the mortgage market by repackaging and selling home loans on the debt markets, Merrill Lynch acquired mortgage origination companies so collateral could be readily available. With AIG as its partner, Merrill Lynch became the largest issuer of CDOs. By the end of 2008, Merrill Lynch had issued CDOs worth $136 billion. In 2005, AIG had stopped insuring even the highest-rated CDOs issued by Merrill Lynch because of its aggressive underwriting policies, but Merrill Lynch continued to do what made the highest profits. When the subprime market slowed down, the entire CDO market unraveled. Merrill Lynch, like many others, did not record its position in the market, as the market and credit rating agencies had failed to anticipate the possibility of large-scale collapse in the housing market.

Merrill Lynch Suffers Monstrous Losses

In late 2007, when Merrill Lynch was forced to admit its liabilities of $7.9 billion and write off $9 billion in holdings, O’Neal was forced to resign, and John Thain took over as CEO. O’Neal was still allowed to retain his $30 million in retirement benefits and $129 million in stocks and options . John Thain also failed to understand the extent of Merrill Lynch’s financial condition, which he later acknowledged. But with further losses of $10 billion in CDOs in 2008, the bank was in serious trouble. With the support of the New York Federal Reserve Bank, Thain approached Bank of America CEO Ken Lewis to sell the company. Although Thain initially turned down the offer from Lewis, he sold Merrill Lynch for $50 billion, at $29 per share. The investment firm had more than $1.02 trillion in assets and more than 60,000 employees worldwide. Bank of America became more universal once it acquired Merrill Lynch. The primary concern for Bank of America was the actual worth of Merrill Lynch in 2008, when the market environment fluctuated rapidly. Lewis wanted to buy the company because of Merrill Lynch’s strongest unit, its 16,000 investment advisors, which would fill a hole in Bank of America’s product offering. The entire transaction took place in the panic when Lehman Brothers was about to declare bankruptcy.

BoA Buys Merrill Lynch

Both Treasury Secretary Hank Paulson and New York Federal Reserve President Timothy Geithner had pressured Bank of America to purchase Merrill Lynch. During the weekend of the Sept. 13, 2008, Bank of America auditors performed due diligence for a potential merger, and an agreement was publically announced on Sept. 15. At the beginning of December, information became known to Lewis that Merrill’s losses were going to be far worse than expected. The anticipated losses were in excess of $13 billion. Lewis asked advice from Bank of America’s legal staff and considered cancelling the offer to acquire Merrill Lynch. On Dec. 17, 2008, Ken Lewis met with Federal Reserve Chairman Ben Bernanke and Paulson; they both urged Lewis not to back out of the deal. They said that pulling out of the deal would create systemic risk to the U.S. economy. On Dec. 21, Lewis was also warned that the government would consider replacing the Board of Directors and management if Bank of America backed out of the deal. The officials also suggested that if Bank of America backed out then any further government assistance would be difficult to obtain. The idea behind this was to demonstrate to the market that even though Lehman had failed, the big banks of Wall Street were cooperating to keep the system running.

Over the next four weeks, the government and Bank of America negotiated a deal that included another $20 billion in direct aid. The government also agreed to back an additional $118 billion to cover potentially bad assets held by Merrill Lynch. None of the above-mentioned communications between the government and Lewis were conducted in an official manner. The government did not want public disclosure at the risk of creating systemic issues in the overall financial system. Lewis and the Board of Directors did not disclose the additional losses to the shareholders. According to Lewis, this decision was not his to make; instead, the government had directed Lewis to keep the information private.

Bonuses for Poor Performance

After the acquisition was finalized, without a public announcement, Bank of America allowed Merrill Lynch’s executives to distribute bonuses of approximately $3.6 billion before the deal closed. Perhaps indicating how these bank executives live in an elite bubble of their own making, neither Lewis nor Thain realized that this small amendment to the contract would eventually spark a state investigation. Oddly, Thain did not seem to understand it was wrong to pay bonuses out to poorly performing employees (whose actions led to the damaging losses), while accepting taxpayers’ money to bail out the bank.

At Bank of America’s request, most of the money would be paid out in cash before the deal closed. The early payment would actually reduce expenses for Bank of America in 2009, ­making it easier for the bank to hit its first-­quarter numbers. Thain had also negotiated a new title for himself: President of Global Banking, Securities and Wealth Management. He would be responsible for planning and executing the merger of Merrill Lynch’s banking and trading business with that of Bank of America. With this deal, Merrill Lynch employees would emerge as winners, with thousands of Bank of America staffers laid off and replaced by their Merrill Lynch counterparts.

After word of the acquisition got out and the bonuses were paid, criticism focused on the price and potential risks, both of which were very high. Some argued that regardless of pressure from the U.S. government, Bank of America should have waited for the markets to adjust after the news of Lehman Brothers bankruptcy.

Ethical Issues:

As chairman and CEO of Bank of America, Lewis has a responsibility to inform the shareholders of the adverse conditions that were present in the Merrill Lynch merger. The same applies to CEO John Thain, who misled shareholders by not being transparent about the losses at Merrill Lynch and the bonuses paid. Another issue for both the CEOs is paying out bonuses right before the acquisition.

On the other hand, Lewis was also responsible for the overall wellbeing of the U.S. and global financial system. Another major crisis to the financial system would have had adverse impacts on Bank of America shareholders and customers. Millions of shareholders clearly had a major stake in the decisions facing Lewis. The CEO must also take into account the interests of nearly 200,000 employees and contractors.

Analysis of Ethical Issues:

The short-term consequences are more easily identified. Lewis and Thain had to consider that if the deal fell through, the overall economy would be adversely impacted. On the other hand, if the deal went through, the shareholders would take an economic blow in terms of diluted share value. Lewis estimated that it would take two to three years for the deal to bring economic value to the corporation, so any shareholders on a short-term horizon would suffer.

The long-term impacts are more difficult to predict. One could argue that letting Merrill Lynch fail would result in a total collapse; on the other hand, allowing the market to take its natural path would be in the best interest of the public and the shareholders.

Public disclosure of the bonuses paid and the true health of Merrill Lynch would have had an immediate impact on Lewis, the Board of Directors and both the companies. The government also stated that the Board of Directors and management would be forced out if the deal did not go through. This would have a large impact on the leaders. Lewis and the board members are all in financially secure positions; therefore, losing their jobs would not have a financial impact. But the corporation would suffer from a government-forced change in leadership with no financial help, not to mention if the deal did not go through and Merrill Lynch was declared bankrupt it would have created more panic in the market — and this was after the fall of Lehman Brothers. The real dilemma was deciding whether secrecy or disclosure would result in greater consequences.

“Doing the right thing” can easily be interpreted as disclosing the information to shareholders, but this action could also have a severe impact on the entire country. No matter what Lewis did, people would be impacted by the decision. Ken Lewis and Thain thought they had only two choices: continue with the deal and keep quiet or pull out of the deal and inform the shareholders of the material adverse conditions of the Merrill Lynch acquisition.

Moral Choices:

Ken Lewis faced enormous consequences without an easy way out. No matter what, Lewis would have to choose an action that would impact a large number of people. The best choice is likely the one that minimizes the damages. Lewis would have to make the choice for the greatest good .

Clearly, Lewis and Thain should not have given out the bonuses in light of the poor performance of management that resulted in the near collapse of Merrill Lynch. On this issue, Lewis and Thain acted unethically.

However, having done so, if Thain had disclosed the bonuses before the acquisition, all of his employees might have lost their jobs, as the deal would not have gone through. On the other hand, he also had to think about the shareholders, who would lose money, and the economy as a whole.

Utilitarian Analysis:

From the utilitarian philosophy of ethical decision making, we can break the decision down based on the choices that will have a greater impact. Failing to disclose the information would have a direct financial impact on the shareholders. Publically disclosing the materially adverse conditions would have potential impact upon the entire financial system. This risk would also impact Bank of America shareholders. Even though a lot of people would suffer from a utilitarian aspect, keeping silent appears to be the better choice.

Ethical decision making can also be based on the duties and obligations of the decision maker. In this case, Lewis and Thain have obligations to both the shareholders and the overall wellbeing of the U.S. financial system. Both Lewis and Thain also have a duty to consider the overall wellbeing and greater good of the entire country. This duty does not omit their obligation to the shareholders, but the universal appeal of the good of the community has a stronger pull than the individual shareholders of the corporation. Lewis’ and Thain’s reputations were on the line. Both were faced with failing at their primary responsibilities.

Ultimately, the decision should be based on seeking the greater good – or it might be more accurate to say choosing the lesser evil . Holding back the information would have certain consequences; however, we can draw a certain boundary around these consequences. Yes, the shareholders will be affected in the short term. However, the deal may turn out to be profitable in the long term. Disclosing the information is a much more dangerous choice. The damage would not only impact Bank of America and its shareholders, it could also easily create global effects.

In the best interest of the corporation, shareholders, and U.S. citizens, my thoughts are that although Ken Lewis and John Thain deceived their shareholders, they might have done the right thing for the greater good in the acquisition of Merrill Lynch without publicly disclosing material adverse consequences.

By: Pratik Patel

Editor: Angela Lutz 

Works Cited

• Linda K. Trevino, Katherine A Nelson, “Managing Business Ethics”, (2010) Fifth Edition
• Jessica Silver-Greenberg & Susanne Craig, Bank of America Settle Suit Over Merrill for $2.43 Billion, September 2012
• Shareholders Transparency Demands Rise  http://www.ethicsworld.org/corporategovernance/corporatereputation.php
• Greg Farrell and Henny Sender, ” The shaming of John Thain”, Financial Times, March 2009.
• Countrywide Financial Problems http://www.ehow.com/about_5444985_countrywide-financial-problems.html
• O.C. Ferrell, John Fraedrich, William Ferrell, “Business Ethics, Ethical Decision Making & Cases”, Ninth Edition
• Bank of America’s Merrill Scandal Reigniteshttp://www.cjr.org/the_audit/bank_of_americas_merrill_scand.php
• How the Thundering Herd Faltered and Fell http://www.nytimes.com/2008/11/09/business/09magic.html?pagewanted=all

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Case Study: Bank of America – The power within – Improving the employee and customer experience

This case study is part of a series of winning 2021 Inspiring Workplaces Awards submissions that we will be publishing in the run up to the 2022 Inspiring Workplaces Awards deadline.

Read on to find out why Bank of America was named a gold winner for Inspiring Experience.

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You have tens of thousands of teammates participating in your organizations onboarding, professional development and education organisation, The Academy, every year, each providing rich insight into their learning experience. 

How do you ensure that you are maximising the reach of employee insights and utilising the data effectively to create meaningful change and continuous development?

Read on to discover how The Academy at Bank of America’s leveraged surveys over multiple touch-points to understand the teammate experience and create a dynamic ‘closed loop’ system that has become pivotal in improving the employee and customer experience – with subsequent data providing a clear correlation between Academy experience and the customer experience.

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Case Study: Bank of America A Lean Six Sigma Deployment Success

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Looking Back On Bank Of America's Countrywide Debacle

Jim Zarroli

Five years ago Friday, Bank of America announced it was buying one of the nation's largest mortgage lenders. Bank officials thought the deal to buy Countrywide Financial would cement Band of America's place at the top of the commercial banking business. But it did not turn out that way.

Copyright © 2013 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Correction Aug. 8, 2017

In the introduction to this report, we mistakenly say Bank of America bought Countrywide Financial for $40 billion. In fact, BoA paid $4 billion for Countrywide. As of early 2013, when this story was broadcast, BoA had paid about $40 billion in legal costs related to earlier claims made against Countrywide.

Case Study: Will a Bank’s New Technology Help or Hurt Morale?

by Leonard A. Schlesinger

Beth Daniels, the CEO of Michigan’s Vanir Bancorp, sat silent as her chief human resources officer and chief financial officer traded jabs. The trio had founded their community bank three years earlier with the mission of serving small-business owners, particularly those on the lower end of the credit spectrum. After getting a start-up off the ground in a mature, heavily regulated industry, they were a tight-knit, battle-tested team. But the current meeting was turning into a civil war.

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Bank of America Helps Customers Keep the Change

How do you encourage new customers to open bank accounts? In 2004, Bank of America used the Design Thinking methodology to look at the problem from a human centered perspective when they assigned design agency IDEO to boost their enrollment numbers: a problem that at the time, lacked any user perspective on why it was so hard for customers to save.

Bank of America hoped to bring a human-centered (Design Thinking) angle to an industry which is hardly known for innovation. Bank of America were especially interested in the customer segment of boomer-age women with children. To conduct the user centered ethnographic research, a team of five Band of America employees partnered up with four IDEO designers. In their user research, the group conducted interviews and observed families in Atlanta, Baltimore, and San Francisco.

Read more...

Also see the HRB Case Study:  Bank of America: Keep the Change

And read the Bloomberg Bank of America case study

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AML Case Study with Answers: Learning from Real-World Scenarios

In the ever-evolving landscape of financial crime, Anti-Money Laundering (AML) compliance is a critical priority for financial institutions. Despite robust frameworks and stringent regulations, many organizations still struggle with effective implementation, leading to significant lapses in AML compliance. Understanding real-world scenarios through case studies can provide invaluable insights into the practical challenges and solutions in this domain.

AML case studies highlight the complexities of preventing money laundering activities and showcase how organizations have either failed or succeeded in managing compliance. By analyzing these case studies, financial institutions can learn from past mistakes and successes, adapting their strategies to enhance their own AML frameworks.

This article explores several case studies, both from Tookitaki's extensive portfolio and industry examples, to provide a comprehensive view of AML compliance challenges and effective solutions. From e-wallets to traditional banks, each case study offers a unique perspective on how different financial entities navigate the complexities of AML compliance. Let's dive into these real-world examples and uncover the lessons they hold.

Case Study 1: E-Wallet Compliance Success with Tookitaki

The problem.

A leading e-wallet provider in Asia faced growing challenges in managing AML compliance. As the platform expanded, it struggled to identify suspicious activities accurately. The existing system generated too many false alerts, overwhelming the compliance team and making it hard to focus on real threats.

Tookitaki's Solution

Tookitaki implemented its Anti-Financial Crime (AFC) Ecosystem and FinCense platform. The solution used AI technology to improve transaction monitoring and reduce false alerts. Key features included:

• AI-Powered Monitoring: The platform analyzed transactions more accurately to spot suspicious activities.
• Better Alert Management: The system reduced false alerts, helping the team focus on genuine risks.
• Quick Scenario Updates: New AML scenarios were quickly added to keep up with emerging threats.

Results and Key Learnings

With Tookitaki's solution, the e-wallet provider saw:

• 50% Fewer False Alerts: The reduced false alerts saved time and resources.
• Improved Detection: More accurate identification of risky transactions.
• Faster Response: The ability to quickly adapt to new threats.

This case shows how advanced technology can help digital platforms stay compliant and secure.

Case study details

Case Study 2: Compliance Solutions for a Payment Processor

A global payment processor was struggling with its AML compliance due to a high volume of transactions and complex cross-border payments. The company faced challenges in detecting suspicious activities across different countries and currencies. Their existing system generated numerous false positives, making it difficult to identify genuine threats and comply with various regulatory requirements.

Tookitaki provided the payment processor with its FinCense platform, integrated with the AFC Ecosystem. The solution offered:

• Advanced AI Screening: The system used AI to accurately screen and monitor transactions, reducing false positives.
• Cross-Border Compliance: The platform handled multiple jurisdictions and currencies, ensuring compliance with different regulatory frameworks.
• Efficient Alert Management: Tookitaki’s solution prioritized alerts, allowing the compliance team to focus on high-risk transactions.

After implementing Tookitaki’s solution, the payment processor achieved:

• 60% Reduction in False Positives: The reduced false positives improved the efficiency of the compliance team.
• Enhanced Cross-Border Monitoring: The platform provided better oversight of international transactions, ensuring compliance across regions.
• Improved Compliance: The solution helped the company meet diverse regulatory requirements, reducing the risk of fines.

This case highlights the importance of using advanced technology to manage complex AML challenges in the global payments industry.

Case Study Details

Case Study 3: AML Compliance for a Digital Bank

A digital bank in Asia was facing difficulties in managing its AML compliance due to rapid growth and a diverse customer base. The bank's existing AML system was outdated and struggled to keep up with the evolving nature of financial crime. This led to an overwhelming number of false alerts and gaps in detecting suspicious activities, putting the bank at risk of regulatory penalties.

Tookitaki implemented its FinCense platform and AFC Ecosystem to strengthen the bank’s AML capabilities. The solution featured:

• Dynamic Risk Scoring: The platform used AI to continuously assess customer risk profiles, ensuring up-to-date evaluations.
• Enhanced Transaction Monitoring: The system monitored all transactions in real-time, using advanced models to identify unusual patterns.
• Integrated Alert Management: Alerts from various sources were consolidated, making it easier for the compliance team to investigate and take action.

With Tookitaki’s solution, the digital bank saw significant improvements:

• 45% Reduction in False Positives: The lower false alert rate allowed the compliance team to focus on real threats.
• Improved Risk Detection: The bank was able to identify and respond to suspicious activities more effectively.
• Streamlined Compliance Operations: The integrated system simplified the compliance workflow, reducing the time needed for investigations.

This case study illustrates how digital banks can enhance their AML efforts by adopting advanced technology and a comprehensive approach to risk management.

Case Study 4: Tackling AML Challenges in Traditional Banks

A traditional bank in Asia faced ongoing challenges in its AML compliance due to a large customer base and complex transaction types. The bank’s legacy system struggled to keep up with new regulatory requirements and evolving money laundering tactics. This resulted in numerous false alerts, delayed investigations, and increased risk of regulatory fines.

Tookitaki deployed its FinCense platform along with the AFC Ecosystem to upgrade the bank’s AML framework. The solution included:

• AI-Driven Monitoring: The platform used AI to monitor transactions in real-time, identifying suspicious activities with greater accuracy.
• Smart Alert Management: Tookitaki’s system reduced the volume of false alerts, helping the compliance team focus on high-risk cases.
• Efficient Case Management: Automated case management streamlined the investigation process, improving response times.

After integrating Tookitaki’s solution, the traditional bank achieved:

• 50% Reduction in False Positives: The improved accuracy reduced unnecessary investigations and saved valuable resources.
• Faster Investigations: Automated workflows cut investigation time by 30%, allowing the team to handle cases more efficiently.
• Enhanced Compliance: The bank met regulatory requirements more effectively, reducing the risk of penalties.

This case demonstrates how traditional banks can modernize their AML systems to handle the complexities of financial crime and compliance.

Key Takeaways from AML Case Studies

Analyzing these real-world AML case studies provides valuable insights into the challenges and best practices for effective compliance. Here are some key lessons learned:

1. Importance of Advanced Technology

All the case studies highlight the critical role of AI and machine learning in enhancing AML efforts. Advanced technologies enable financial institutions to accurately monitor transactions, reduce false positives, and adapt quickly to new threats.

2. Dynamic and Scalable Solutions

Scalable and flexible solutions, like Tookitaki's FinCense platform, are essential for organizations of all sizes, from digital banks to traditional financial institutions. These solutions allow institutions to customize their AML strategies according to their unique needs and regulatory environments.

3. Efficient Alert Management

Managing false positives is a common challenge across all case studies. Implementing smart alert management systems not only reduces the number of false alerts but also helps compliance teams focus on genuine risks, improving overall efficiency.

4. Holistic Approach to Compliance

Integrating multiple compliance processes, such as transaction monitoring and risk scoring, into a single platform helps in creating a comprehensive AML framework. This integrated approach ensures better coordination and quicker responses to suspicious activities.

5. Continuous Adaptation and Learning

Financial crime tactics are constantly evolving. To stay ahead, organizations need a solution that can learn and adapt over time. Leveraging community-driven insights, like those from Tookitaki’s AFC Ecosystem, helps in staying updated with the latest threats and typologies.

These takeaways emphasize the need for financial institutions to adopt modern, technology-driven AML solutions that are adaptable, efficient, and comprehensive.

Conclusion: Effective AML Compliance Through Case-Based Learning

AML compliance is a complex and ever-evolving challenge for financial institutions worldwide. As highlighted in the case studies, organizations often struggle with outdated technology, inefficient processes, and a lack of integration. Learning from real-world scenarios is crucial for understanding these challenges and finding effective solutions.

Tookitaki’s case studies demonstrate how advanced technology, community-driven intelligence, and a holistic approach can significantly enhance AML compliance. By leveraging AI and machine learning, Tookitaki’s FinCense platform and AFC Ecosystem provide comprehensive solutions that adapt to new threats, reduce false positives, and streamline compliance processes.

For financial institutions looking to strengthen their AML frameworks, it’s essential to adopt solutions that are not only effective but also adaptable to the ever-changing landscape of financial crime. By learning from past experiences and embracing innovative technology, organizations can ensure robust compliance and safeguard against financial crimes.

Ready to Enhance Your AML Compliance?

Discover how Tookitaki’s FinCense platform and AFC Ecosystem can transform your AML compliance strategy. Contact us today for a demo or consultation and take the first step towards a more secure and efficient compliance framework.

Anti-Financial Crime Compliance with Tookitaki?

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