Exec Details B of A's IT Streamlining Effort

Flying lower on the radar than Bank of America Corp.'s latest round of job cuts is a separate but equally crucial streamlining effort.

Last year Chief Executive Brian Moynihan put veteran executive Catherine Bessant in charge of overhauling the Charlotte company's information technology infrastructure. Cost reduction is part of her mission as head of the integrated global technology and operations division.

For most major activities — card processing, payment processing, foreign exchange trading — Bank of America would like to use one platform across the entire organization.

Simplification at Bank of America also means doing more with less: fewer data centers, fewer applications, and "fewer elements to every vertical that starts with a great idea and ends with a customer," Bessant says in an interview with Bank Technology News.

Bank of America has a sprawling network of 55 data centers, mostly in the U.S. Bessant plans to cut this number in half over the next 18 to 24 months. She's already shut down two data centers and 92 server rooms.

One factor in deciding which facilities to keep and which to ditch will be the nearby availability of renewable, inexpensive sources of power such as hydropower electric plants. "Since power is the number one expense in a data center, we want to use or develop alternative sources of power that ultimately should prove to be more reliable and cheaper," Bessant says.

Rival money center banks, including Wells Fargo & Co., Citigroup Inc. and JP Morgan Chase & Co., went through the exercise of server and data center "rationalization" and server virtualization to improve usage rates several years ago.

Bessant is working to cut the number of applications the bank uses from 7,000 down to 3,500 or fewer. "We often have multiple applications that do the same thing, for instance, three different apps that help us send wire transfers," she says. In the new order, workflow software will be used more prominently, to automate manual processes and achieve straight-through processing wherever possible. "This effort to modernize and simplify what we're doing is largely about reduction of manual tasks and emphasis on automation," she says.

Editor's note: This is an excerpt from an upcoming cover story in Bank Technology News. The full item will appear in the September issue.