Bank of America

Executive Summary

Bank of America is known to be one of the world leaders in the financial sector. As a leading financial institution, it serves both individual customers, and businesses, including small and medium businesses and large corporations. Its services include banking and investments, asset management, and finance and risk management services that are unmatched elsewhere. The clientele of the Bank of America is approximately 47 million, with the bank having flourishing relations with consumers and business. There are 4,700 retail financial centers of the bank around the country, with 16,000 ATMs around. The bank also provides online services, which have won many awards, where there are around 33 million active accounts with 20 million mobile users. The Bank of America essentially is a global leader in the financial market with its portfolios in wealth management, investment and corporate banking, and in trading across a wide range of assets , providing its services to individuals, institutions, corporations, and even governments not only nationally, but internationally as well. Around 3 million small businesses have been provided assistance in the shape of online products services that are innovative and easy to use. Apart from providing its expertise in all of the 50 states of United States, the Bank of America is also established in District of Columbia, Puerto Rico, U.S Virgin Islands, and in 35 other countries around the world. The Bank is listed on the New York Stock Exchange as Bank of America Corporation stock (NYSE: BAC)

Existing Mission and Strategies

The Bank of America relies on four core values to help its clientele get easier access to finance and make people’s financial lives better. They do so by empowering all their connection. The four core values are deliver together, act responsibly, realize the power of people, and trust the team. Delivering together entails that each customer, individual or corporation, as important and essential to the Bank itself. The Bank believes in delivering the best, going to places if needed too. The value entails delivering with passion and discipline, by connecting with people on a personal level, understanding and empathizing with them to deliver the best. The Bank believes that every step it takes for clients and customers, and also the teams and communities it serves in, builds on and upon the foundation of business the organization is set on, that promises deliver to its shareholders (Pirson, n.d.).

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Act responsibly; the second core value is based on upholding integrity and management of the business. The organization is aware of the affects its decisions and actions have on people on an everyday level, and so, it believes in making its acts as transparent as possible and grounded in community building and success sharing. The bank essentially believes in the power of the people, both in terms of clientele and the employee. It realizes the power of its employees and strives for them to reach their full potential. The bank realizes that diversity is a key for success and that it makes an organization stronger. It values differences in ideas, cultures, thoughts and experiences, and wants to use it to make the organization better. It realizes that better outcomes are achieved when people work together and not individually. As a value, Bank of America wants to build mutual trust amongst its people and teams, making ownership of the business shared and increasing accountability. To sum up, the bank of America builds its values on working together with people, both customers and employees and builds on human relations and connections for shared success.

The Bank works on the values of delivering the best financial services. Not taking away from its operating principles and its core values, a suggestion for the organizational mission would be to incorporate technology. For example, the Bank can aim to create the best online system and software, par excellence, to serve costumers globally, getting ahead of its competition. As it seeks to expand globally, they Bank can extend its services to organizations and governments, with adding the missions to be transparent and accountable for actions that affect communities it operates in. This helps build trust in customers and adds on to the ethics of the organization.

The Bank of America essentially works on three business types, the traditional banking being its largest portfolio. This portfolio accepts deposits for money saving and grants out loans to borrowers. In 2013, traditional banking was of $23.8 billion, with its 72 per cent of customers and revenue coming from this area. Commercial customers account for the remaining 28 per cent of the revenue the bank generates.

The second business and the second largest one is the investment banking that generated $10.5 billion revenue for the Bank of America in just the first six months of 2015. 36 percent of revenue for investment banking portfolio comes from debt trading and equity securities selling and trading. Second largest generator of revenue for this sector is the advisory services that the Bank provides to mergers and acquisitions. Stock underwriting and bond sales also generate revenue for investment banking. 11 per cent of revenue is generated from brokerage services that is basically providing trading advice and services to investors and institutions like hedge funds. The last 25 per cent of the pie of revenue come from interest income and other miscellaneous services.

Asset management and wealth management makes up the third business portfolio of the Bank of America. This portion made revenue of $9.1 billion in the first and also the second quarters of 2015. 83 per cent of the revenue generated through this business comes from Merrill Lynch, the thundering herd of financial advisors. This section serves the rich people of America, meaning people who have a net worth of more than $250,000. US Trust makes up for the remaining 17 per cent. US trust is a subsidiary that serves clients with high and ultra-high net worth.

Bank of America has established an eminent franchise service in the United States to serve customers and business in the country. Through mostly acquisitions the bank has managed to successfully build a retail and distribution network since its inception. It purchased Merrill Lynch and Countrywide Financial after which the bank reached a clientele of 1.5 million clients and $90 billion assets (Raphael, 1986).

Its main competition happens to be Wells Ferro, which gives Bank of America competition in many markets, having a similar retail and distribution network. Other entity that competes with the Bank to give it a level playing field is JP Morgan. JP Morgan acquired Bear Stearns in 2008 adding to its own portfolio of operations after it received finances and guarantees from the Federal Bank of New York.

Essentially, the Bank of America’s strategy is to use its franchise in serving three basic consumers, the individuals, corporations and institutions. It pledged to do no more acquisitions and focus on improving its services and integrate the current acquisitions completely in the business. Although the bank gets only about 13 per cent of the revenue from non US clientele, which is very less compared to what its counterparts get, it looks forward to grow in that market as well. Bank of America today hence, is looking forward to grow in the emerging markets.

As an organization that is operating in diverse markets and places, the Bank of America essentially believes in making its diverse network. It hopes so do that in both its relations with people including employees, and also in the products it offers. This is hopes will set it apart from the competitors.

New Mission and Business Model

As a suggested business model, I would recommend Bank of America to not only look out for new ventures globally, but also try to adapt to new cultures and environments in countries it seeks to expand in. precisely, the organization should not take a rigid model of its business, be it deposit banking, asset trading, or advisory services, but it should rather adapt to the business environments of the new places it goes to. Banking seems like a linear procedure, universal across the world, but if we truly seek out, there are countries that have different models of banking, for example, Islamic Banking that has come up as a new area in the field. Similarly, attitudes to banking differ in different cultures as well. What is recommended to the Bank of America is to not only diversify in terms of employers, but also look at diversification through franchising in cultures different from the west. It’s time to look at the east, especially the emerging markets. Doing this will truly make the organization stand out amongst its competitors (KOLLMANN, 2013).



KOLLMANN, R. (2013). Global Banks, Financial Shocks, and International Business Cycles: Evidence from an Estimated Model. Journal of Money, Credit and Banking, 45(s2), pp.159-195.

Pirson, M. (n.d.). Business Models for Responsible Banking A Trend Towards More Humanistic Banking?. SSRN Electronic Journal.

Raphael, D. (1986). Betting the bank on technology—Technology strategic planning at Bank of America. Long Range Planning, 19(2), pp.23-30.