AI Will Be a Boon for Savers

Sometime in the next few years, an ordinary American will give a simple instruction to an AI assistant: “Make sure my money is always working.” From that moment on, his cash may never sit still again.

The agent will sweep idle savings into whatever insured account pays the most. It will find high-paying savings accounts and ladder certificates of deposit without the owner’s learning what laddering means. This is agentic banking—software that displays your finances and acts on them—and the banking industry isn’t prepared for how fast it’s coming.

A staggering share of bank profitability rests on money that doesn’t move. This is true across the board, not only for big banks.

Americans hold roughly $10.4 trillion in savings and other liquid deposits. The Federal Deposit Insurance Corp.’s national average savings rate—the deposit-weighted average across every insured institution—is a mere 0.38%. At that rate, the system pays savers about $40 billion a year. The best nationally available savings accounts tracked by Bankrate pay around 4%. The same balances at that rate would earn more than $400 billion.

Even extremely conservative assumptions—half those balances stay put for good reasons, and top rates compress as money moves—leave Americans forgoing well over $150 billion a year. Call it the laziness tax: a quiet, regressive wealth transfer from inattentive consumers to the banking system.

AI agents will largely abolish it. The inertia that keeps a saver from spending 20 minutes to earn $1,000 disappears when the 20 minutes do. Every account becomes a shopped account. For consumers, this is unambiguously good: the largest, fastest transfer of value from financial institutions to households in generations, accomplished by software rather than regulation.

An agent working for a consumer can also flag junk fees, catch unauthorized charges, decode fine print and steer its owner away from predatory products. It can help accomplish, one household at a time, much of what the Consumer Financial Protection Bureau was created to do through enforcement. The regulatory challenge will be ensuring that agents’ actions stay aligned with consumers’ best interests.

But AI agents will strain the system that makes lending possible. Banks will be funding long-duration loans with money that can leave in 30 seconds. The Silicon Valley Bank crisis of March 2023 offered a preview of what can happen when technology accelerates money: Tens of billions of dollars left one bank in a day. Agents automate and accelerate that speed. Liquidity models built on human sluggishness will become a distant memory.

To survive when AI moves money automatically, banks will need to change how they do business. 

by John Delaney and Bill Foster, Wall Street Journal | Read more:
Image: Getty Images

[ed. Possible. But it'll take a heavy lift to get people to hand over their financial accounts (and security protections) to AI. What about criminal AIs that exploit that?]