Apollo warns AI cash shifts could pressure U.S. banks

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Apollo warns AI risks for banks

Highlights

Apollo chief economist Torsten Slok warns widespread household adoption of AI cash management could shift low-cost deposits from banks to higher-yield fintechs offering 3.3-5.0% APY.
Pressure on traditional banks intensifies as SoFi deposits yield 4.5% compared to the 0.1% national average, with Muse and other AI tools accelerating automatic cash flows.
The Invesco KBW Bank ETF dropped 2.3% last week and 5.7% for the month, with Goldman Sachs, Bank of America, and Charles Schwab each down more than 8% in September.

AI-driven deposit risk emerges

As reported by CNBC, Apollo Global Management chief economist Torsten Slok says a wider use of AI agents to optimize household cash returns could threaten a key source of cheap funding for banks.

In a post titled "Is an Agentic Bank Run Coming?", Slok writes that if households broadly adopt AI assistants to shift idle balances automatically, banks could lose a large share of the low-cost deposits they rely on to make loans. He says fintech companies are already offering much more attractive yields than traditional banks, pointing to SoFi Technologies deposits with a 4.5% APY versus a 0.1% national average.

Slok adds that tools such as Muse and similar agentic AI assistants could soon sweep household cash automatically into accounts paying 3.3% to 5.0%, increasing pressure on banks if such behavior becomes widespread.

Rate pressure deepens sector weakness

The warning comes as financial stocks are already under strain from surging U.S. Treasury yields, which have climbed to multiyear highs as traders bet elevated oil prices will push the Federal Reserve to tighten monetary policy further.

The Invesco KBW Bank ETF fell 2.3% last week, extending its losing streak to three straight weeks, its longest since mid-March. The fund is down 5.7% month to date and is on pace for its worst monthly performance since March 2025, when it dropped nearly 10%.

Goldman Sachs and Bank of America are the ETF's weakest performers this month, each down more than 8%, while Morgan Stanley is lower by nearly 8% in September. Brokerage stocks have also been hit, with Charles Schwab down 9.8% and Interactive Brokers off 8.3% this month.

There are no signs that a bank run is happening or is about to happen, but Slok's argument suggests agentic AI could make it easier for consumers to redirect cash into higher-yielding fintech accounts, adding another layer of pressure on the banking industry.

Our earlier coverage of the oil-driven market selloff explained how a spike in crude prices helped push longer-dated U.S. Treasury yields to fresh multi-decade highs, weighing on stock futures. It also noted that traders were increasingly focused on upcoming inflation and jobs data and the growing odds of another Fed rate hike as energy-driven inflation risks resurfaced.

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