Meta’s AI agent could help customers shift idle bank cash into higher-yielding options, threatening banks’ margins. Bank of America analyst Ebrahim Poonawala said the risk remains theoretical unless deposit costs rise beyond what rate changes or competition explain.
Meta’s app can connect users’ financial accounts, monitor balances and investments, offer recommendations, and take actions for them. As investors weighed the AI threat, the KBW Nasdaq Bank Index fell about 2.6% on Tuesday; bank stocks have since recovered some of those losses.
A similar cash shift hit Charles Schwab in 2023: as rates rose, customers moved billions from lower-interest accounts into higher-yielding money-market funds. Schwab had to draw on costly short-term funding, and profits declined throughout the year. Deposit competition is already heating up as lending growth accelerates. Citi launched a savings-rate initiative this week to attract existing cash and other assets, following similar moves by PNC and Bank of America. JPMorgan’s Jamie Dimon has floated a Smart Cash wealth-management product that has not yet been released.
