- Key insight: : Like most banks and fintechs, American Express is investing in artificial intelligence and determining how the technology will impact workflows.
- Expert quote: "It's not even early innings yet, it's the preseason." –American Express CEO Steve Squeri
- Forward look: Squeri says it's still early and AI's full impact will emerge in the coming years.
With banks considering
"We have a large backlog of tech products, with AI we are getting to more things quicker," Amex CEO Steve Squeri said during Friday's earnings call. Squeri said Amex is investing in new forms of AI for internal and external uses, and is seeing some early impact in speed to market and efficiency. But a deeper dramatic impact on product development, workflows and revenue generation will likely come in the future."It's not even early innings yet, it's the preseason," he said.
Amex's earnings
For the second quarter, Amex reported net income of $3.11 billion, up from $2.88 billion a year ago. Earnings per share was $4.53, up from $4.08 a year ago. Revenue rose to $19.64 billion from $17.8 billion. Billed business, or overall customer spending, was $445.8 billion, up from $416.3 billion the prior year. Analysts expected Amex to post quarterly earnings of $4.40, with revenue of $19.62 billion, according to Zacks Investment Research.
Amex projected full-year growth of 10%, a slight boost from an earlier projection of a range between 9% and 10%, and affirmed its existing profit guidance of $17.30 to $17.90 per share.Squeri said Amex had "stronger momentum than we expected" through the first half of the year, and consumers were responding to the company's recent premium card refresh.
Amex recently made its "
The firm is competing with fintech rivals such as Block's Cash App and Revolut, which have lured Gen Z consumers by offering integrated crypto trading and social payment features. Amex faces threats in high-end cards from
"The high-end consumer remains strong," Jeffries analysts said in a research note about Amex's earnings. "While [Amex's] billed business was [relatively] flat, it still demonstrated the strength of the high-end consumer."
Is AI taking jobs?
As
Amex this year launched an AI-powered service portal for its service representatives that's designed to reduce the time needed for calls. Regarding the impact on employment, Amex reported a "lack of acceleration in hiring" in its customer service operation even as the volume of business for that group has increased.
While some fintechs have directly
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"The number of reps hasn't grown. Over time it will decrease from attrition," Squeri said.
Amex is also using AI to streamline marketing campaigns and get those campaigns outfaster, the company said. And while Amex has used AI to manage credit, risk and fraud for more than a decade, it has expanded AI to include analysis of more data sources.
Squeri additionally addressed newer forms of AI. As agentic commerce takes off in financial services, the card company says that its closed loop model, which includes direct relationships with merchants and consumers, can help it monitor an entire transaction to battle fraud.
"With agentic commerce, it is fraught with not only fraud but also hallucinations," Squeri said, noting Amex insures AI-powered payments. "We have the data from both sides. We know what the customer wanted to buy and what the merchant delivered."
In an effort to take advantage of new forms of AI, Amex supports the
Amex has integrated generative AI into its internal workflows, using AI agents to automate parts or all of tasks such as credit underwriting, fraud detection, and personalized customer service.In recent months, Amex launched a Graphite Business Cash card, the start of a pipeline of more than a half-dozen business-focused products that will be released over the next year.
"We are embarking on an era in which AI-powered agents can discover products and services, make decisions, and complete transactions on behalf of consumers and businesses, from booking travel and making dinner reservations to replenishing business inventories, managing expenses, and completing payments autonomously," Squeri said in a
In addition to the Graphite Business Card, Amex has developed a platform that combines card and expense management, business employee expenses, physical and virtual card issuance, spending insights, and connections to enterprise resource planning and human resource systems.
"Concerns of AI-driven job displacement linger, but we believe technology should drive long-term economic growth, and Amex's ability to capture and retain younger customers should serve as a tailwind," William Blair analysts said in a research note.
