Consumer Spending Isn't Matching Economic Anxiety. Here's What Bank Of America’s Data Tells Us

0:00Consumers say they're concerned about the economy, but according to our next guest, they're spending money as if they're not worried at all. Welcome to C-Suite Unscripted. I'm Maggie McGrath, your host, and today I sat down with Holly O 'Neill. She's the president of consumer banking at Bank of America, a division that touches 70 million consumers around the country. This year is her 30th anniversary with the bank, so we talked about how she unintentionally became a lifer. Along the way, we also talked about what she thinks people most need to understand about the$100 trillion wealth transfer and the opportunity she sees in Erica, Bank of America's AI agent.

0:41Let's dive in.

0:47Holly O 'Neill, thank you so much for sitting down with us. Thanks for having me, Maggie. You are the president of consumer banking at Bank of America. you are responsible for the needs of close to 70 million consumers, 3 ,700 financial centers, 15 ,000 ATMs. Those are the numbers. Can you give the 60-second overview of what your job looks like on a daily basis? Sure. So we're here to serve nearly 70 million consumer clients and help them with their daily financial needs and essentially to make their financial lives better. Not to sound really catchy, but it's as simple as that. And so I often say we have 70 million clients and we have 70 million unique combinations of what financial health means to each one of those clients.

1:33So we're there to serve their needs and make their lives easier. So that means everything from credit cards to daily banking, anything that someone needs on a daily basis, you are in charge It does. And for us, it starts with the daily operating account, what's known as a checking account, right? How people live day to day, make payments, pay for groceries, pay for gas. And then that relationship expands to credit cards, home lending, auto lending, if they need to purchase a car, and then on to investments as well as their needs get a little more sophisticated and people are looking to start saving and investing.

2:11you know, it's essentially that. It's really simple. It's a core operating account coupled with lending when a client needs that and investing. As we look at 2026, there's a lot to talk about in all of those buckets. And I know the Bank of America Institute regularly puts out the consumer checkpoint, which is basically, it's a useful report to see credit card activity and general consumer strength. You get asked about this all the time. But as we look at the summer strength. There was an interesting statistic that indicated credit card and debit card spending was up 6.3 % in June, which was some of the highest growth in the last four years, I think.

2:51So as we look at the consumer, there's so much conversation about where is consumer spending, how has the war in Iran affected prices and therefore affected consumer spending. What's your assessment of the strength of the consumer in 2026? Sure. So for 2026, generally, the consumer is very healthy. And we look at a whole variety of measures. And the Institute is a great spot to go for sound bites on the health of the consumer. But I would say overall, in 2026, the consumer has been really healthy. And we look at things like spending, as you mentioned, and they're still spending. And they change what they spend in a bit.

3:29And I'll just give you one example. So as gas prices started to go up in the spring, you know, spending obviously went up significantly, but then you strip out the gas prices and they're still spending, right? Their spending is still going up. So that says the core foundation of the consumer is pretty healthy. And that was in one of our earlier checkpoints. But I think the summary so far in 2026 is we're still seeing strength in the consumer. We're not seeing any real challenge areas from a credit perspective. We're still seeing healthy the amounts of liquidity in those daily accounts that they have.

4:02And they're still at levels higher than what they were pre-pandemic, which is a really good signal. And so the consumer looks really good. And I think the consumer is very educated around financial health and they make trade-offs along the way. They do some more spending and value categories versus luxury if they're sensing a little bit of a pinch. So we see trade-offs in different cohorts, But overall, I think the consumer is very healthy. I was going to say, are you seeing higher activity in grocery versus travel, for instance? So travel is a really interesting one because coming out of COVID, we saw travel really go crazy.

4:41Pent-up demand. Total pent-up demand. And I think, you know, we're seeing a more normalized level of travel. Obviously, in the summer months, you see more travel spend than you may in other months. But I think travel has leveled out since the pandemic and we're seeing more normalized levels of travel. You know, we see clients still paying for experiences. And I think that might be a permanent shift coming out of the pandemic as people really value the experiences going to the concert, going to the ballgame, going to a soccer match. So, you know, there are different patterns and you could break it down in hundreds of ways, depending on what the cohort is.

5:16But overall, you know, I think the trends on health are pretty strong. As I've listened to you talk about this in other interviews, you've been pressed on this in moments of economic precarity, questions about recessions in prior years. And I want to talk about sentiment versus actual behavior. This is true outside of finance. You ask people what they think and then you see what they do and the two don't always correlate. But for you in your role, how do you square that circle, so to speak? Like you're looking at actual data in terms of actual behavior, but I'm sure you see sentiment data. Can you talk about how different these two things can be and then what that does for you and your team?

5:58They can be very different. And in recent times, I would say they are very different. So consumers are saying one thing, but the behavior and the data is telling us something slightly different. And it's what we just talked about in terms of we're seeing healthy patterns of spending and they're still spending, which signals a healthy economy. At the same time, you've seen more volatility in the sentiment numbers where they're very concerned about the economy. They're feeling stretched. And so you really, for me, in the position I'm in, I look at both numbers. But you have to look at the sentiment numbers in the context of what they're actually doing to determine what are the real patterns here.

6:43And the sentiment numbers, I think, are really interesting because it tells me what's on the mind of the consumer. So if they're concerned about the economy or they're concerned about making ends meet or their budget, you know, that tells me, you know, we have to do more in terms of education and financial health information. So what they're saying remains very important because it's what's on their mind. But the health of the economy, I think, is more signaled by their actual behavior and their patterns. So both are important and you have to look at them both together to determine, you know, what does the whole picture really look like?

7:20Is there a point at which the dichotomy turns into a red flag for you where sentiment and behavior either if it converges, then that's a clear signal. But if it even grows even farther, do you start questioning the data? Do you start questioning the behavior? I'm just wondering, especially for folks who are listening who read this data on their own, they look at their own reports, they may not always see yours. But I think we have a lot of viewers, listeners and readers who want to figure out on their own the health of the economy. So what are the red flags for you when you're looking at all of this?

7:53Well, certainly you would question data if there was a long-term divergence in what they're saying versus what they're doing. So you would look at the data to determine, you know, are we seeing certain segments that are under pressure different than others? But I do think that we have seen a permanent shift in the fact that sentiment and behavior are different. And I think part of it is because consumers are very well informed. They're very well educated. They consume information from all sorts of different venues and channels. And so I think they have a lot of information that they're digesting, leading to a difference in the sentiment number versus what they're actually doing.

8:40Part of the reason I'm asking about dichotomies and red flags is literally yesterday an executive was sitting in your seat. We were talking about layoffs for AI and some of the numbers company by company are not existentially concerning. It's, of course, personally concerning for everyone who loses their job or who gets replaced by AI. But I was asking this executive, where are we in the cycle? Is this just early days of some of these AI layoffs? And, you know, getting to what does this mean for the economy? What does this mean for Americans? I turn this question to you from the consumer perspective.

9:13Do you look at hiring trends, firing trends? And what's your take on what we've seen this year so far? Certainly. So we've certainly seen some trends, a lot of talk about AI and the impact of AI. I think for Bank of America, we have over 200 ,000 employees. I am spending time this afternoon with 2 ,000 new hires that joined our company this week, which is really incredible and always fun to participate in. And, you know, I look at the new AI technology that we've all come to know in the last 24 months as an opportunity for us, both from a client perspective, but also from an associate perspective.

9:56How do we train our teams to use the tools to make us better at what we do? And it's very similar. If you look past over the last decade, the automation that's taken place in banking, right? It's changed how we do banking with 70 million clients. And we managed to go through that cycle, retrain our teams, adjust our business without any significant layoffs. And I see the future of AI not as very different from that. It's going to take us time to adopt AI in the right ways for both clients and our teams. And there's huge opportunity to do our business better, to help our clients do better financial planning, better spending and budgeting, making it easier for them.

10:41So I really am looking at it as a complement to the business versus a real complete step function change. And, you know, this will take place over the next decade. This is not taking place over the next 12 months. We have a lot of work to do and a lot of experimentation to do in the next, you know, short term, you know, coming to three years. But it's a long term transformation. I think it's a huge opportunity. And for us, you know, our accountability is to make sure we're training our teams in the right way, leveraging AI, giving them the tools that they need to use to make themselves better and to engage with clients differently.

11:23One of the things that we were talking about before we started recording was Erica, the AI agent for Bank of America. And I had not made that connection until you emphasized the pronunciation. What is Erica and how are consumers responding to her? We call it her, but it could be it. We launched Erica in 2018. That was a long time ago. That was over eight years ago. Technology was very different. It was the first virtual financial assistant out there. today we have 24 million clients who use Erica on a regular basis. So we've gotten great adoption with Erica. Now, that being said, we have completely new technology available to us today that will make Erica better, will make Erica more innovative.

12:10It'll give Erica a memory. It will make Erica more conversational than it is today. We've had great success with Erica. We were the first in the marketplace to have an AI assistant. And I think with the new technology, it will just continue to get better and better. And I look at that from a client perspective. Today, we have 24 million clients who use Erica. They're going to be able to use Erica for even more. And hopefully more clients will continue to use it because it does make the day-to-day easier. Instead of, you know, picking up the phone and calling to ask a question, you can ask Erica.

12:45And, you know, I'm sure you've used some type of a chat function. At times, it's much more seamless for clients. One thing we've been really careful about, though, with Erica is that as clients engage with Erica, they always have an option of getting to somebody on our team, a human. And so we expect to continue that. And that's made this transition to Erica really smooth for us. It's enabled us to drive client satisfaction to much higher levels. at the same time we've been automating portions of the business. So we've done that at the same time we've had a very keen focus on making sure the experience for clients is smooth and seamless.

13:26It's so interesting to look at technological innovation within consumer banking. I've had experiences with student loans, checking accounts, 401ks. There's a lot to interact with on a personal level, I'm sure a lot of our viewers can relate. And the degree of innovation can vary so much by institution to institution. And in part, I think because of the regulatory environment, I was trying to change an automatic check payment yesterday through my bank. I misstated a number. So my landlord was getting 50 cents short. I actually, it was 50 cents, but you know what, I needed to fix it and I couldn't figure out how to do it on the mobile app in 2026.

14:09So on my to do list for today is to figure out if I can do this through the desktop. And I don't want to put my financial institution on blast, but I think it speaks to just the varying degrees that exist. So how have you interacted with the regulators when it comes to building these products? Because you want sophistication. You have consumers who are used to AI agents in other aspects of their lives or digital innovation in other aspects of their lives. And sometimes it feels like banking can be the very last to adopt some of these innovations. So I think, number one, companies outside of banking are setting the bar for what consumers expect.

14:43And you said that, right? Other companies like Amazon and Apple, they're setting a very high bar for what consumers expect. And we have to deliver that, to your point, in a regulated framework, making sure we get it right for clients each and every time. So the example you share about a bill payment that you need to correct is a great example of why you still have to have human support there to help clients through the exception problem. You know, 99.9 % of the time, your bill payments go through without a hitch. But this is a great example of why having great service agents and financial centers across the country are there to support clients when they have a challenge or a question.

15:29And so for me, strategically, that is part of the safety net that we have for our clients is that we want to make it super easy to pay a bill to pay your landlord. But we also know that sometimes things happen that you have to correct or fix. Now, ideally, you would go through and be able to fix that in the mobile app, right? And so it's a great example of what we call end-to-end process management and really understanding where is it not working completely digitally. In an ideal world, you should be able to fix that in the mobile app, right? But the realities behind the scenes in banking are that that check was probably already processed.

16:14So probably already in your landlord's hands. So that makes it a little more challenging to do in an automated fashion. I wrote him a check for the difference. The issue is the ongoing checks that I couldn't figure out. But again, it speaks to the complexity of everything that you interact with on a consumer basis. Now, I know we've been talking about consumer banking and more credit cards and spending. How much do you think about long-term investment? because we've been running stories about the great wealth transfer. And there's one on Forbes Women just today about how north of$100 trillion will change hands over the next 20 to 25 years.

16:48It does depend on which data source you consult. But I think everyone's in agreement that a massive amount of money is going to be shifting hands over the next 20 to 25 years. In your role, do you have to think about that? Are you thinking about that? Absolutely. And I think you're right. No matter what data source you go to, you can argue about what the number is, but the number is huge. And it's very important to our clients who are both leaving the wealth and accepting the wealth. And so it's really important for us as a company to educate our clients on what are the options available and make that transition really seamless and smooth.

17:27And it's interesting because I had a group of Gen Z's in a room yesterday. And one of the questions I asked them is, you know, what is one thing that you need to be educated on that you don't think you're educated on? And they said investing. And I think that's part of the generational wealth transfer dilemma. And so it's incumbent upon us to educate our clients on what does it mean to invest? How do you get started? What are the options available to you? And I think it's one of the unique areas at Bank of America that we have Merrill Edge, which is an online investing tool in our consumer business and it's part of our core capability.

18:08But that is also connected to our wealth management business with Merrill Lynch and the private bank through what we call the wealth continuum with that generational wealth transfer in mind. So we really try to make it smooth and seamless across the company, starting with the very basics for clients. And education is one of those components. You talked about talking to Gen Z. You mentioned 2 ,000 new hires that you'll be meeting with. I want to transition to how you communicate within such a large organization with such a large leadership purview. What have been the strategies that you employ as an executive to do this effectively?

18:48because that's a massive amount of people to interact with. It's a lot of people and you communicate early and often and over and over and over again in a whole different variety of channels and venues, right? And a lot of it's online. We do a lot of leadership engagement with our new hires and our interns just so they get exposure to different parts of the company. We pay really close attention to how we train and prepare our managers to handle new people coming into the company, especially in the Gen Z cohort, because they're a different generation and they have different expectations. They have different needs.

19:29And I think we've got to be ready to handle that. So our communication is extensive. We have a great team at the bank that does a whole variety of uses a whole variety of communication channels and education. Right. And giving them the opportunity to take different training and to learn about different things and really making it all available to them. One of the biggest challenges, though, is making sure they know everything that is available because there is so much and you really have to capture them in the moment where it's most relevant to them. Well, it's also hard, I imagine, as communication habits and preferences and trends change.

20:12I've turned into someone who internally at Forbes, I say, Slack, please Slack me, do not email me, because my email is so widely used by external sources. And that's not something I was saying 10 years ago. But it's a delineation I've had to make. Have you had to adjust in a similar way? I think that adjustment is underway. way. I'm an email user, but I do have three Gen Z children who think email is basically the Pony Express. So I think it's something we all have to adjust to. And I actually like how you differentiated that use Slack for internal because then it helps you to prioritize and then your email is available for external.

20:56So I'm actually going to take that one back. That's a really good tool because your email does get full. It gets so full. And sometimes a designer on the design team has a question about a package that I'm editing. And I don't want that to get lost amid pitches and scheduling emails for C-Speed Unscripted. That's right. That's right. So it's a really good question that I think we are still adjusting to because the modes of communication are different. And, you know, that real-time Slack type communication people use frequently. I am probably not as good as at that as I need to be. And it's something I'm practicing.

21:31That's all we can do. And I will never send my children an email because it was basically the Pony Express. I want to ask you about game changers because when I was prepping for this interview, I saw you in the interviewer seat talking to a variety of people, including a very prominent restaurateur here in New York. What is this? Why do you do it? So it's something I started a couple of years ago, two or three years ago. And I did it as a mechanism to get outside perspectives inside the company, inside our consumer business. So we talked at the beginning about how other companies are really setting the bar for what consumer expectations are.

22:09So I really wanted to bring that outside perspective in. And that was one way to do it, is to bring these game-changing executives from other industries in to talk about what they're doing, to challenge the team, to think a little bit differently, think outside the box from financial services. And we've had some fantastic guests. We had Will Godara, who you mentioned, who is a world famous restaurateur. I've had Charlotte Jones, who works with the Dallas Cowboys and has a whole fan experience that I thought was really intriguing. So we've had a whole variety of guests from different facets and with different perspectives.

22:50And the team absolutely loves it because it does challenge your thinking about being a bank and delivering a great experience to the clients and using outside ideas. Has there been a business innovation that your team has presented to you that's come from the world of NFL or restaurants? Well, I think Will Godara, who we just had on Game Changers last year, and then we had him at an internal event, really hit it home for our teams who work with 70 million clients, right? So he talked about delighting the client and what it means to connect with each and every single client that walks in the door of your financial center.

23:34And so I heard from so many people after we had him, not only on Game Changers, but we had them live at an event with our team, that that really made them think about when we're sitting in one of our 3 ,500 financial centers and that client walks through the door, making contact with that client and delivering them a really unique experience. And I think as automation becomes more prevalent in financial services, in banking, that human connection is going to be even more important to our teams. That was one that I think was most meaningful to us in the day-to-day. And it wasn't necessarily an innovation, which is interesting.

24:18It's more the human connection. Because as a financial services provider, having trust with your clients, there is nothing more important. And I think how you build that trust today when so much is done digitally is changing. And so it's making those human connections even more important for our teams. When we talk about evolution and change, we haven't stated this outright, but you've been at Bank of America for 30 years as of this year. Normally in these interviews, I print out someone's resume. I ask about, oh, what was this first job? What was the second job? Your resume is very streamlined.

24:57There was nothing for me to print out. I mean, I mean, I could have. It's simple. It's unique in this year, maybe. I don't know. I have family members who spent 47 years at P &G or my dad was at SEPTA in Philadelphia for something like 32 years. So my family has a lot of lifetimers in their careers. There was years ago, a lot of stories about millennial job hoppers, but a 30 year tenure at an organization. Zoom back to 1996 for a second. Did you ever imagine staying for three decades? I did not. Honestly, I really didn't. But I'm going to talk about the Pony Express because I got that job in 1996 by answering an ad in the newspaper for your younger listeners.

25:40And so I started in the corporate and investment bank. I came in through a training program. I thought it was a great foundation to have. And as it turns out, I still think that to this day, I learned how to analyze a financial services company. So I spent 10 years in that business, doing deals, working with companies, financial service companies. And I loved the job. But I knew I didn't want to stay there my whole career. And I had an opportunity to then take a role in our global wealth and investment management business. So working with high net worth individuals. And so I took it. And, you know, I did not have my career plotted out exactly.

26:23But it was an opportunity for me to do something different. And I could leverage what I had done in the global corporate and investment bank. And I spent 10 years there, mostly in strategic roles. I was the COO for the private wealth business and the private bank. And I got to learn that business really well, kind of from a behind the scenes perspective, but very strategic in nature. Was that your first time in a C-suite role in that position? It was. What was the biggest learning going from more rank and file managerial to C-suite? I learned that transition was how to be a manager, you know, going from being, you know, somewhat of an individual contributor to what it takes to manage people.

27:04And it was a great learning for me. It was a relatively small business scale wise in terms of the number of people, but very sophisticated in terms of the strategy. And I think that was a great stepping stone for me into the consumer business, which was completely the opposite. You go from a high touch business with very sophisticated clients to a high scale business with simpler needs, but the business is very complex. So I spent 10 years in wealth and then I was ready to own something myself and I was given the opportunity to run service for the consumer business. So 70 million clients run the service channel.

27:47We deployed a whole focus around the client and delivering a great experience. And this was in 2016. So the digital transformation was underway. And we knew that as we were automating the business, right, and driving efficiency, we didn't want to do that at the cost of delivering a subpar client experience. So we did both at the same time. And very interestingly, not only did we automate big parts of the business, but we did that at the same time. We drove really high levels of client satisfaction. And that's what I've been doing for the last 10 years and different roles now leading the consumer business.

28:28but it's you know a business you asked what I learned in wealth it was how to be a manager how to manage people how to set strategy for a business and then I brought that learning to the consumer business much bigger business scaled business 70 million clients where every turn of the dial has very big impact not only on your clients but also on your team so it was a great it was a great learning ground for me. So when you say nobody's ever called me a lifer, but I guess I am. This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense.

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29:31Well, a career is long. You've been in our 50 over 50 list, which is a list of women stepping into their greatest power over the age of 50. And there are so many stories of starting something new at the age of 65, at the age of 75. So you could be a lifer. We could be talking in another 15 years and you and I would both still be at our institutions or who knows. knows what's in store. I do think I'm a lifer, but, you know, I do feel like I've had very different experiences at the company, which is what's kept me interested. You know, I worked in the corporate and investment bank in wealth, and now I'm in consumer.

30:08It almost feels like three different companies because the application and the challenge were all very unique. So that's really kept me interested and challenged over the last 30 years. So it's certainly been a fun ride. I mean, you have made a change once every 10 years, it sounds like. So what's in store for the next year to 10? That's right. That's right. I think I'm good in the consumer business. We have a lot to do. I think we talked about AI a little. There are so many exciting things ahead for us. And, you know, AI is one of those components. I look at it as a really good challenge for both our teams and for the business.

30:50You know, where are we going to take this next? And I think we're going to take it in a direction that's really positive for our clients. It's going to make life a lot easier. It's going to drive a much better experience. And that's my goal. As you look at your tenure at Bank of America, there are landmark anniversary moments, the 10-year anniversary, the 15-year anniversary. And it can be natural to think, OK, that's a nice even number. And that's a nice run. Maybe I should do something else, go somewhere else. Did you ever think that? And how did you navigate those moments? I sure did. And that's why you saw me jump from one business to the next to the next.

31:31And, you know, I often describe this to people who are starting out in their careers. Take advantage of what you have in front of you. And working for a big company has so many opportunities. You can do so many different things. Take advantage of that. And I think that's looking back, that's what I did. And when I was ready to take on a new challenge, I looked internally first, right? I used my network. I volunteered on a unique project to get exposure to something different. And those were opportunities I took advantage of versus going outside the company. And, you know, certainly there were points along my career where I wanted to do something different.

32:17And the first step that I took was looking internally and using the network that I had built. And that worked to my advantage because I was given different opportunities. I will say going from the wealth business into consumer was not a move I ever would have scripted. Interesting. And I remember going home and telling my husband that I was going to run service for the consumer business. And I think he looked at me like I had 10 heads. Really? You're going from the private wealth business to essentially running call centers. And I said, well, that's true. I said, but what really intrigues me is that we're going through this digital transformation And we're looking at the call centers as opportunities to improve the client experience and leverage digital.

33:07And there's a whole strategy aspect to this role outside of running call centers. And so that's really what piqued my interest. I never would have had that opportunity if I had gone outside the company because I had an established reputation. I leveraged that to take on new and unique experiences that were additive to my resume. And so I think when you're internal, that is an advantage. You have an established reputation and somebody is probably more willing to give you give you a new challenge. Right. Because they know who you are. You have some political capital. That's right. And you have almost a cushion.

33:47That's right. If you do make a misstep. That's exactly right. And so I, you know, it wasn't necessarily intentional the whole time, but that's, as I look back, that's exactly how I navigated. And so I think it's natural for people to think I'm not going to be at a company for 30 years. And, you know, there are very few people who have the same job for 30 years. And I, you know, I think it's great to try new and different things, but take advantage of, as you said, the political capital that you have at an existing company and leverage that to take on new challenges and opportunities. And I, you know, that that's one way to do it.

34:24And that certainly was the path that I chose. Normally, I would end there because that would seem like a great place to end. But when I talk to people who've worked in finance for as long as you have, I like to take a look back at economic cycles. You started at Bank of America in 1996, which means you were there for the dot-com bubble. You were there for the 2008 financial crisis. You were there for the market crash, if you will, at the beginning of COVID, the post-COVID recovery. And I remember 2022 felt so precarious in so many ways after the frothiness of 2021. As you look at all of those experiences, what does this economic moment feel like?

35:02And what would you say to folks who feel as uncertain now as they might have felt in 2007, eight and nine? Well, I definitely think, you know, while there are a lot of variables in the economy in the world today, the economy is relatively stable. And I would say be prepared for everything, anything, because it can change. And I think going through all of those different moments that you mentioned, you learn that but it doesn't stay good all the time. And you have to be prepared for when the market changes, when the environment changes. And so set yourself up to be prepared for anything and everything, because it can happen.

35:46And I think, you know, we learned that during COVID. You know, even going into COVID, I don't think anyone believed we would have gone through what we did as a country, as a world, as an economy. and I certainly didn't as we were, you know, I look back to that, you know, January, February timeframe, and I certainly didn't foresee that. And I think that was a really important lesson for anything can happen and you have to be prepared for it. And, you know, going through those moments, having stability in your leadership rank and, you know, being toe-to-toe with your teams and making sure you're managing through those events are really important.

36:29Holly O 'Neill, Thank you so much for sitting down with us. We so appreciate your time and your insights. Thanks for having me, Maggie.