Bank Of America SWOT Analysis 2021

Bank Of America SWOT Analysis

This is a thorough SWOT study that is a thorough SWOT analysis of Bank of America. It is designed to analyze the strengths and weak points that exist in Bank of America. 

It also seeks to understand the potential threats and opportunities that the bank faces. Bank of America Corporation is an American multinational investment bank as well as a financial services firm. 

Although it has had a long tradition its current name Bank of America brand was established in 1998 in the aftermath of the merger between BankAmerica as well as NationsBank.

Bank Of America SWOT Analysis

 

Quick Stats on Bank of America
Founder Amadeo Giannini, Hugh McColl
Year Founded 1998
Origin San Francisco, United States
No. of Employees 200,000
Company Type Public
Market Cap $388.66 Billion (2021)
Annual Revenue $85.52 billion (2020)
Net Profit $17.89 billion (2020)

Strengths In SWOT Analysis Of Bank Of America

Bank Of America SWOT Analysis

Strengths lie in the internal elements of an organization which help to maintain a solid position on the market. Below are the main strengths of Bank of America –

  • Worldwide PresenceBank of America is said to have products and services in over 35 countries that are not part of its home in the United States. In the year 2020, the company made a profit of nearly 3.5 billion dollars on its loan products and services.
  • Consistent Growth With the exception of a decrease in sales per year and net earnings in 2020 as a result of the covid-19 virus, Bank of America has maintained a growth rate over the past few years. Investors and customers have faith in Bank of America due to the steady increase in revenue.
  • Service and Innovation –Bank of America happens to be among of the banks with the highest innovation because it offers a broad assortment of products and services that are tailored to the needs of its customers. In reality, the company has been named as the “Most innovative banks of North America” by Fortune magazine in 2020. The bank has a robust service offering to customers across around 150 different countries across the globe.

Weaknesses In SWOT Analysis Of Bank Of America

Bank Of America SWOT Analysis

These weaknesses are caused by internal and strategic factors that can be a hindrance to the business. The following are the weaknesses in Bank of America –

  • Lawsuits and ControversiesIn 2014 BoA agreed to a settlement in the amount of 16.65 billion dollars after not disclosing the cost of buying back mortgages. The year 2009 was the time that BoA confronted a myriad of consumer claims lawsuits claiming it handled its transactions in the manner that each customer was charged hundreds of dollars in charges. A lawsuit was brought by the bank BoA in 2021. The lawsuit claimed that they were unable to obtain the unemployment assistance accounts of thousands of people.
  • In countries with low incomes that are not in of the US –Despite having operations in 150 countries around the globe, Bank of America produces approximately 95% of its earnings from its operations located in the United States of America and only 10 percent of its revenue from other countries of the world.
  • High-Interest RatesMany individuals believe Bank of America charges exorbitant interest rates that are not justified.

Opportunities In SWOT Analysis Of Bank Of America

Bank Of America SWOT Analysis

Opportunities, an external element are opportunities that an organization should take advantage of in order to grow within the field. Here are the opportunities offered by Bank of America –

  • Partnerships and Acquisitions in 1998. Bank of America was formed in 1998. Bank of America was formed through the acquisition and merger from NationsBank along with BankAmerica. In the past, it has joined FleetBoston Financial in 2004, MBNA in 2005, The US Trust Company in 2006, LaSalle Bank in 2007 as well as a number of other mergers and acquisitions. The bank is expected to continue to merge and buy similarly which will help the bank to increase its market share and influence.
  • credit cards worth credit cards as well as online banking are increasing in popularity and are valued by customers. The services are currently offered by BoA. Now, the bank must go one step further and be more efficient in these areas. This will allow the bank to stand out from the crowd.
  • Development of Tech and Product Development of products and technologies another area in which Bank of America may innovate and offer interesting services for its customers is the development of products. It is also in a position to improve its standing in the domestic market as a result of this. Internet-connected activities, like internet banking, are increasing in many emerging nations. This offers Bank of America an excellent opportunity to make its services and technology available to these nations.

Threat In SWOT Analysis Of Bank Of America

Bank Of America SWOT Analysis

Threats are external factors that are a problem for an organization. Here are the risks to Bank of America –

  • Security Breach – In the month of April 2020 there was an information breach of a security breach at BoA which revealed information of BoA’s Paycheck Protection Program. This isn’t the first time that BoA’s database was hacked. Customers have been able to access online and online banking since BoA started offering these services. BoA has been increasingly vulnerable to cyber-attacks. The company is portrayed as unstable and vulnerable.
  • A changing financial world The global financial situation is changing. The global financial situation is held by a few threads which, as we’ve witnessed in the past, presents a constant threat to people within the financial and banking services sectors.

There are limitations to SWOT Analyses in Bank of America

While it is true that the SWOT analysis is extensively used as a tool for strategic planning, However, the analysis has some limitations.

  • Certain abilities or aspects of an organization could be both strengths and weaknesses at the same time. This is among the main drawbacks that SWOT analysis has. For instance, changing environmental regulations can be dangerous to companies, but however, it could also be an opportunity in the sense that it can allow companies to be on the same level or gain an advantage over their competitors, if they are could develop their product quicker than competitors.
  • SWOT is not able to show you how to get a competitive edge It is not a strategy to gain a competitive advantage, therefore it should not be a complete solution.
  • The matrix is merely an idea to begin an analysis of how the proposed strategies can be implemented. It offered an evaluation window, but not any implementation plan that is based on strategic competitiveness. Bank of America
  • The SWOT model is a static evaluation and analysis of the existing conditions and a small number of potential modifications. When circumstances, capabilities, as well as threats and strategies, evolve, the dynamics of a competitive setting will not be apparent in the form of a single matrix.
  • SWOT analysis could make a firm overemphasize one external or internal aspect when formulating strategies. There are interrelations among important external and internal elements that SWOT cannot reveal that can be vital in formulating strategies.

The SWOT Analysis is Weighted and Weighted by Bank of America

Given the above-stated weaknesses of the SWOT analysis/ matrix, the management of corporate determined to give the weightage of every weakness and strength of the company. 

Companies also evaluate the probability of events happening in the near future and the impact they will be on the company’s performance.

This is referred to as weighted SWOT analysis. It is superior to simple SWOT analysis as using weighted SWOT Analysis Bank of America managers are able to focus on the most important aspects and eliminate the less important ones. 

It also eliminates the long list issue which is when organizations make an extensive list, but with none is considered to be important.

Bank of America SWOT Analysis FAQ

What is a SWOT analysis of a bank?

A SWOT analysis for an institution formally examines the institution’s strengths as well as its weaknesses, opportunities, and risks. The SWOT study of the bank evaluates its strengths as well as its weaknesses, opportunities, and threats.

Is Bank of America a good bank?

Bank of America is an acceptable choice when you’re looking to consolidate your financial affairs in one location, but it’s not the best choice if trying to get the best interest rate on your cash. The bank offers almost every bank product that retails that is available that including checking accounts to loans, savings as well as a credit cards.

What is Bank of America culture?

The Bank of America’s culture encourages employees to adopt actions that promote diversity. One of the core beliefs of the company is that diversity in human resources increases the competitive advantage for its services in the financial sector. Therefore, Bank of America uses its company culture to encourage employees.

What is Bank of America’s business strategy?

Modeled on Michael. Porter’s model of competitive strategy Based on Michael E. Porter’s competitive strategy model, Bank of America’s principal general plan follows Cost leadership. Cost leadership is about aiming for lower costs when it comes to providing financial services. As a result that the banking firm maximizes its profits.

What makes Bank of America unique?

Bank of America isn’t the only bank to have access to these kinds of funds.  What is different about Bank of America in this regard is it has more deposits that are not interest-bearing more than the other banks in the United States. This advantage dates back to the beginning of Bank of America’s history.

What is Bank of America’s mission?

Bank of America’s mission is “ to make financial lives more enjoyable by connecting the people whom we assist with the support they require to succeed. .” The company’s goal is to develop and grow by making use of its resources to help people and communities in achieving their professional and personal goals.

Is Bank of America an ethical company?

With the trust that our clients and customers give us, comes an obligation to conduct ethical conduct in all that we do. The Bank of America Code of Ethics is our guide for fulfilling our obligation. It is the Bank of America Code of Ethics that applies to all employed by our business, which includes all directors and employees.

Conclusion

Bank of America remains one of the largest banking institutions within the United States and maintains a steady presence around the world. This is in spite of the numerous disputes and lawsuits it has been through.

Bank of America also continues to introduce new services and products in order to deal with the shifts in consumer behavior resulting from COVID-19. 

But, it is also facing many risks due to external factors including data branches as well as the current global economic downturn. Strategies should be put in place to limit the potential negative effects of these dangers.

A SWOT assessment is an approach to strategic planning which helps to identify the strengths, weaknesses, opportunities, and threats to a company. It ensures that goals are clearly defined, and both external and internal elements that affect a business or venture are clearly identified.

If you’re looking to improve your business acumen and improving your problem-solving abilities take a look at our other SWOT analysis examples. 

Explore the template for SWOT analysis as well as our How-to guide for more information about SWOT analysis and the ways they will benefit your business.

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