Cathy Bessant focuses on what constant technology and industry change means for jobs, the future of banking, and how companies of the future are organized.

The following transcript has been lightly edited and condensed for ease of reading.


David Kirkpatrick: Cathy Bessant is about to join me onstage. She is the chief operations and technology officer at Bank of America.

Cathy is an extraordinary person; I hope you will agree as you listen to her. I found her to be so on the phone, as you may have read in some of the things I’ve written since then. We call this section “Will Tech Unify or Divide?” partly because of some of the things she was saying.

But before I get to that, American Banker named her the most powerful woman in banking in 2018. There’s 95,000 employees that report to her in 35 countries. She runs a $15 billion budget. And I think, you know, Bank of America, as I learned from you and from other things, is—they’re doing a lot of interesting things that are quite unusual. Now, when we talked on the phone, you said we were at a crossroads. I think to some extent, you know, we—I don’t know if you even saw this. Did you see our cover of our magazine and how we—

Cathy Bessant: I did.

Kirkpatrick: Is that the crossroads you mean? What did you mean by being at a crossroads?

Bessant: Well, I think it starts, David—and thank you, first of all, for having me. I’m excited about this. But I think it starts with the fact that it’s undeniable that our use of technology and technological capability has outstripped the underpinnings of infrastructure, social infrastructure, societal infrastructure, legal, ethical, whatnot. And so the crossroads that we are on, or at, in my opinion has to do with how will the fact that we’re using it before we know how to manage it, how will that sort itself out? And I can see my—I can see a path to outcomes that drive great societal good and I can see myself to a path of outcomes that do not. And I believe that business leadership and civic leadership and great thoughtful thinkers have a job, have to have a mission to ensure that as we sort out legal, ethical, social, societal—that we sort it out to choose the path of good. But it won’t be the path of least resistance, frankly.

Kirkpatrick: Yeah, well and this dichotomy of unify or divide, which is your dichotomy on the phone, it’s interesting that was so echoed by Scott Heiferman, who’s the founder of Meetup, in our opening session this morning. You know, he talks a lot about how to find a way for tech to bring us together, even in the physical world, because that’s obviously what Meetup has always focused on, and not drive us apart. And we can so easily point to ways that it is driving us apart. Are you optimistic that we can find unifying tools and forces and methodologies as we go forward?

Bessant: I’m optimistic by nature, but I don’t think optimism in this sense turns into outcome on accident. I think it requires a lot of deliberate work to take the optimism to be the reality. The example that I used with you on the phone I think about all the time, I think about what happens when we’re 5G enabled and all of us have new 5G-equipped devices.

Kirkpatrick: This is the topic of the next session by the way.

Bessant: And what happens in the parts of our world that cannot pay for those new devices, or for counties where they run an inner city school system and a suburban school system, guess who gets the resources to buy the new devices? It’s the kids in the richer suburban environments. And I just think that has to be from the outset unacceptable to us. And the choices that we make, even the foundational choices we make today about experimentation and institutionalization of things like 5G have to begin with the notion of equality in mind.

Kirkpatrick: So I’ve got to ask you, why are you thinking about these things as the COO of Bank of America?

Bessant: Well, does that seem like an oxymoron to all of you? I’m just kidding.

Kirkpatrick: Well, it sadly can seem like—I mean, I think it’s very apt and wonderful, but it isn’t what one might expect.

Bessant: Well, a couple of things. One is we take very seriously at the soul of our firm—and that’s not an advertisement, it’s a simple statement. We take very seriously at the soul of our firm that we are the Bank of America and we have to stand for equality and justice, and the fundamental reason the banking system was created, which was the democratization and the safety of money, has to be pervasive in every way that we think about our role in society. I am telling you it is—I just left a conversation at the bank where what we were talking about was environmental sustainability, private prisons. We were talking about tobacco and what is our role in the economy in topics like that.

Kirkpatrick: You mean like whether—should credit cards to be used for buying guns and that kind of thing.

Bessant: Those kinds of things. That’s just at the soul of who we are. That’s one piece of it.

The other piece of the reason we’re so engaged is that we know that vibrant markets, economically sound and economically sustainable markets make a much more beneficial market for banking, for financial services, for the movement of money, for the creation of jobs, the flow of capital. And the environments where there are economic haves and economic have-nots are by definition undermined in terms of sustaining vibrancy. So yes, it’s part of the DNA of the firm from the soul, but it’s also a shareholder mission in that vibrant markets require equality and vibrant markets produce better banking.

Kirkpatrick: Do you think there’s something about banking that forces that issue to the fore before other industries? Because frankly, there are not too many industries where leaders at your level are talking at the sort of scope that you’re talking.

Bessant: Well—

Kirkpatrick: Or is this just you?

Bessant: No. I like to think we’re better at it than other people or that we’re more committed to it. Competitively, I would like all of you to believe that. That’s, you know—I’m a competitive person. But I do believe that banking created—and no kidding, I’m not being hokey about this. Banking created at the same time our constitution and our country were created means that our role in the citizenry has given us this responsibility from jump. And when you think about things that—even that the last panel was talking about and the issues that you’ve been talking about today and will talk about day to day, the privacy, the role of the individual, those are things in banking that we’ve had to deal with for years, and why? We’re in the trust business. People trust us with two super important things. They trust us with their information that must be safe because it’s extremely sensitive, and they trust us with their money. And so when you’re in the business of the trust of other people’s money, everything we’ve done has to be designed with preserving that trust in mind. So we’ve been regulated on data and privacy for 30 years. We’ve been regulated on disclosures about the use of data for years and years. And so this is the fabric—but I do buy, I guess as I’m processing it, I do buy what you’re saying. That trust moniker gives us a special responsibility to be ahead versus behind.

Kirkpatrick: Yeah. Well, I was just remembering as we were sitting here, I hadn’t even thought of it, last year on this stage we had somebody from Citibank talking about why they weren’t going to let their credit cards be used to buy guns, you know? So you know, this is—this industry has done some pretty amazing things. And—but you recently helped found something called the Council on the Responsible Use of AI and you’re funding that at the Kennedy School and you’re trying to gather other industries to participate in it. And here we are at this moment, where we’re about to head into an IOT, 5G, AI society that we probably by universal agreement aren’t really prepared for. Is this directly connected to the point of trust you were talking about, why you would want to advocate for the responsible use of AI?

Bessant: Well, a couple of things. First of all, there’s also another trust contract, which is trust with our employees. And about two years ago—really the origin of the concept in my mind happened two years ago when I was doing—I do a monthly call with my 9,000 managers and I allow them to ask questions anonymously so that they can ask me anything they want to, and believe me they do. But I began to start to get questions on, “We hear what you’re saying about a commitment to workforce and a commitment to workforce transformation, but what does that mean for me?” And we started to hear, even in quarterly public conversations in financial services with analysts as we announce results, people have no choice but to say technology replaces jobs and that’s how we’re getting more efficient. So there was at best a fear, at worst a distrust from our employees in how transformation would really effect them. In fact, we did some statistical research and found out that when you use the word ‘transform’ to an employee, that’s fine, but how they interpret it is, “Yeah, you’re going to transform me right out of a job.”

And so I began to have questions come to me where I believed answers had to be credible. And so we began on this notion of what does it really mean to transform a workforce? Well, you quickly get into a discussion that says it’s not as simple as reskilling our own people, although that is an extremely important part of it and we work very hard at that. But the educational system has to line up. We have to be able to share taxonomies so as we build new skills across industries and across multidisciplinary organizations, that skills are transferrable in a contemporary, modern language. And the infrastructure of job transformation did not exist and I still believe, and the firm believes, it’s an area where we have a lot of work to do.

So issue with employee questions, not finding an infrastructure where there was agreement on how to move forward and we said we’ve got to change the dialogue. So the purpose of Harvard is to bring together a lot of the sectors that the last panel talked about, government, regulators, the creators of artificial intelligence, the buyers of artificial intelligence, those impacted by artificial intelligence, and try to have the conversation that starts with, okay, really powerful tool, important for growth, can make society a better place. How do we make sure every element of how we are as a society learns from the mistakes of the past and moves forward ahead of potentially problematic results instead of in reaction to problematic results?

Kirkpatrick: Wow. Wow, that’s like such an illustration of our theme, which is collaboration for responsible growth. I mean you’re trying to really do it. And the fact that Bank of America led that is really unusual and I really have to credit you. I’m very excited to have you here because of that.

So, so many things to talk about. But we were talking about what it means to be a tech company. How do you think about that?

Bessant: Well, I think—it’s interesting, because I’ve been thinking a lot about what companies began thinking they were tech companies and what they are today. Or how what start out as simple creative conceptual applications or what starts as software development becomes something completely different. You might start with a great software capability to connect riders with drivers. You suddenly find yourself just a few years later with large scale labor issues, questions of inventory, questions about pricing, questions about safety of your riders. Running that kind of company versus a software development company, two completely different things. And so a company that starts as a connectivity platform over time becomes a data platform and potentially a monetization of data platform as its economic model. So—

Kirkpatrick: A company connecting you to your friends ends up becoming a political, you know, activity platform. I mean, it’s the same kind of thing.

Bessant: And suddenly we’re in a discussion of First Amendment rights when really we were connecting individuals together in ways they wanted to be connected and were hungry to be connected.

So I don’t have a very good answer to your question. What I think is that organizational models and technology, what we call technology companies today actually have much bigger issues than the technology themselves. And I worry less about what is the next technological advancement than I do how will we absorb and adjust and, like I said earlier, catch up to the technological advancements that we’re living with today.

But it’s super hard because I don’t want to sound like a dinosaur. And I have a firm who every day works to connect customers and clients to market leading financial services capabilities. So sounding like a dinosaur means no one will want to work for me and our customers won’t want to bank with us and my CEO probably won’t be very happy. So I can’t sound like a dinosaur. And yet responsible and dinosaur are not oxymorons—cannot be thought of in the same way. Responsibility doesn’t mean slow, it means healthy.

Kirkpatrick: Now you said the fourth industrial revolution is too easy of a concept. What did you mean by that? I mean, we go to Davos, and Klaus Schwab kind of popularized that and has proven very useful for some people. But what do you think about it as a definition of where we are?

Bessant: Well I think the fourth industrial revolution is a simple version of technological revolution and a simple version of automation, robots will replace manual skills and algorithms will replace human pencil-based analysis. I mean, that’s generally the concept. And the concept is—and I think, to the conversation we just had about organizational models and the pace of change versus societal readiness, societal readiness is not as simple as what do we do with automation or how do we deploy technology. These are complicated concepts that—you know, the question that came up earlier about do we have optimism that multiple countries will come together and have some sort of regulatory harmonization, there’s not a chance that that could happen. So it isn’t as simple as how will we get countries to line up, right? We’re going to go one country at a time and every country is going to try to do more than somebody else and we will tsunami our way into the regulatory framework that we’ve got. It’s happening already.

Kirkpatrick: Wow. You know, a couple of quick things that you said—

Bessant: Just so you know, I’m so frightened about how that will read in a tweet, I can’t even tell you right now.

Kirkpatrick: Oh, that’s all right. We don’t care.

Bessant: I know you don’t care.

Kirkpatrick: This is why I like having you here.

Bessant: I know. That’s why I’m scared to death.

Kirkpatrick: You talked about going slow in tech deployment—you’re not that scared. You deliberately go slow in tech deployment, and another thing—I’m going to throw two questions together—and you also refuse to work with partners that don’t share your values in some key ways. Those are sort of two sides of the same mindset. Talk about that.

Bessant: So first, scale has to matter. So David’s referring to a conversation we had about our work in disability advocacy. I chair a disability advocacy network at the bank. Technology should be the great unifier and the great access provider for people with disabilities, and yet—and so we put into our RFP processes and our standards for the third parties that we work with questions and requirements around adherence at a minimum—minimum—to the Americans with Disabilities Act. And we have made, in at least two choices I can think of personally, we’ve made decisions to exit vendors who won’t even answer the question. They’re people that won’t answer that question, so if—again go back to this notion of democratization of credit, accessibility, equality. Scale has to matter in that discussion too and when you’ve got purchasing power, we believe it’s important to use it.

So that was the second part of the question. What was the first part?

Kirkpatrick: Go slow was the other part.

Bessant: Oh, yeah, yeah, yeah. Well, again, trust and the fact that we’re moving people’s money. And the price of failure in that kind of environment is too high for us always—sometimes we will—always to be first to market.

Kirkpatrick: With a new tech or something?

Bessant: With a new capability, with something that we may not understand the implications of. It is unacceptable in our space, in our way of thinking in support of customers and clients to learn once we’re in production. You know, this is what my team always says, “Let’s learn once we’re in production.” Absolutely not. Can’t do it.

Kirkpatrick: Don’t move fast and break things.

Bessant: Don’t—things will be—we cannot learn from things being broken. We must go at the pace that ensures they won’t be broken.

Kirkpatrick: Ah, okay. Well, you know, you also have this thing called Erica, which is your digital assistant, with a lot of AI behind it, I assume. And I’m a credit card customer of B of A, just happens—your app is extremely useful and much easier to use than other apps that I’ve used from that industry. So congrats to you, because that’s I know directly under your responsibility. But that’s an example—I mean, you didn’t like immediately become Alexa—speaking of Erica, whatever that relationship is.

Bessant: It’s all women because we’re super smart.


Kirkpatrick: Okay. All right. Anyway, I just wanted to throw that out. But I want to hear one or two quick questions from the audience or comments before we—

Bessant: Wait, I just have to say one thing. Erica didn’t happen by accident. You cannot voice activate Erica. You first have to activate—

Kirkpatrick: Yeah.

Bessant: You have to first be authenticated into the app. You then have to click on the Erica button and you then have to click on the microphone button. There is no, “Erica” and something happens.

Kirkpatrick: You’re not forcing it on people. You’re definitely—it’s in there, but you have to sort of look for it.

Bessant: My team would kill me for saying it this way, but it was designed with three levels of effectively affirmative use in mind before we get to a moment. And I will tell you that most of our clients choose to type rather than to speak at this point in their own use of Erica. But it is in some ways a testament to the strength of our team that we have the first digital assistant because the technology could have gone faster, but designing for protection was more important than going first, only in this case we were.

Kirkpatrick: You happened to be first anyway. Okay, quick, okay—the mike’s right there. Identify yourself first.

Smolan: Hi, Rick Smolan, Against All Odds Productions. The controversy that actions taken by Wells Fargo over the last couple of years seem to be the opposite of trust in terms of how they’ve dealt with their customers. Do you think that the punishments, the retribution, the restrictions that have been put on Wells Fargo are fair? What would you do to fix Wells Fargo?

Kirkpatrick: Just an easy one.


Bessant: You know—

Kirkpatrick: There is a contrast between the two companies, I’ve got to say. It’s kind of amazing when you think about two banks coming out of San Francisco back in the day, what a difference.

Bessant: It is impossible to dispute, frankly, that almost—I’ve never found a firm in financial institutions that wasn’t well intentioned. And I am a product of the financial crisis. So I am telling you that I believe that financial services is a well intended industry. I can’t speak to anything at Wells Fargo. I know that trust and the maintenance and restoration, or the enhancement and insurance at all times is a really important thing for us in financial services. We take it really seriously and our leadership’s all over it.

Kirkpatrick: Before the next question, I want to say one thing. This is not even to be discussed. It’s just a point. Bank of America has committed to a $17 dollar an hour minimum wage for all employees. It’s going to raise it to $20 dollars soon, and I think that’s the highest of any major company in the country. And they also don’t raise health insurance rates for employees who make under $50,000 a year, which is pretty cool stuff. So I saw a hand over here, yes? And they’re not a sponsor of Techonomy, I just am impressed by these people.

Kaiya: Hi there, Sinead Kaiya from SAP. I find it interesting that consumers go to great lengths to protect their money with financial institutions trusted such as yours but give away their data really for free. Is there any discussion in the financial services industry about getting into data management for consumers?

Bessant: Well, first of all, I think that we all gave away our data, me included, before we had any notion of understanding how it could be used. When I looked up directions five years ago for the first time, did I ever know someone would track me, let alone my husband, you know? I mean, I’m kidding. Don’t tell him I said that. But, so I think we’re all—we all did it, even smart people in financial services.

I think, look, we have become very adept over three decades at protecting customer data because we conceived of it that way and we knew it was so important in effect because we control the ways companies come in and access our data even when they’ve been given permission by consumers, i.e. financial aggregators. Because we control that so carefully, we do do the same thing. Whether that’s a business for us, it’s not core to banking so I would not believe it would be. But we do a ton of education, we protect our customers when we work with third parties that they authorize to represent them. And so I’d say we go beyond the walls or the networks of banking, but making that a line of business, I’m not so sure. But Bill McDermott I’m sure will be talking to me about that soon. [laughs]

Kirkpatrick: Just a quick question, and I know we have to wrap soon, but do you think a lot about blockchain as a tool in that kind of arena? How much do you think about it?

Bessant: I try to think about blockchain less than people ask me about it.


I’m sorry to—I don’t mean to be flip. This is so interesting because I think culturally, great technologists are born to admire the importance—legitimately admire the importance of the technology they’re creating. In a commercial sense, I have to balance the beauty of the technology with does it benefit a customer or client or does it make us better internally. And so I think I have a lot of high hope and optimism about blockchain. We hold more blockchain patents than any other financial services company, but I have yet to find a use case—I have yet to find a use case that impacts a customer or client or our business and I’ve slowed down our team for hunting for those use cases. I used to hold them accountable to coming to me for those use cases. Now I throw the challenge out to the purveyors of blockchain to say, “Show me a use case and we’ll experiment with it,” and I haven’t had any takers.

Kirkpatrick: Interesting. We have a great blockchain conversation later this afternoon. Do we have one more question, comment? Yes. Identify yourself, please.

Audience 1: Thank you. My name is Sebastian Rejak, I come from Denmark. On the topic of responsible growth, I was really interested in what you said early on about the conversations you were having at the bank around environmental sustainability and private prisons. Those were topics where a company such as yours could have a huge impact. Could you share a little more about what are those conversations around how are you thinking about those issues and doing impactful change around those issues?

Bessant: Well, I think that for today, the important thing for you to know is that we have the conversations and we have dynamic debate and discussions. If you were a shareholder or a customer or client, we have the kind of discussions I think you would be proud to know that we’re having. We’ve got a great track record of being on the forefront of these issues. We focused on childcare and family benefits three decades ago. We’ve been actively engaged for 20 years in equality for the LGBT community. We—go pick an issue and we’ve had a long track record of being socially advanced and socially progressive in our views.

Kirkpatrick: Nice answer. Okay, real quick, Michael. And this will have to be the last question, unfortunately.

Michael: One of the things we’ve talked a lot here is about how we’ve ended up with silos of information and monopolies in certain industries compared with a generation ago. Obviously, the banking industry is much more consolidated than it used to be. How does that impact the way you think about safety, security, competition than the way you used to?

Bessant: Well, if I haven’t made it clear enough already, we take that mission very seriously. Interestingly enough, there’s another dynamic in that mix, which is our customers expect us to use their data across the firm. So if they invest with us and have a loan with us, they want that data to be looked at as one. They want to be seen as a holistic customer regardless of our silos. So we have had to do both, balance the silos of the firm with the idea that our customers and clients want to be seen as a whole. From my perspective, the issue of organizational structure or organizational construct is not the inherent risk. The inherent risk—and I believe risk can be mitigated under a wide variety of corporate structures. The issue is risk culture, customer and client understanding, and the understanding of the depth with which they think of these own issues as existential to them, and the ways that companies are built to ensure proper governance and proper oversight for their activities. And I’ve seen—I used to be a banker, I mean a line banker calling on customers and clients, large institutional clients.