McKinsey Says Bank Profits Face Possible $170 Billion AI Hit

Banks face a hit to their bottom lines of as much as $170 billion if they don't adapt their business models to respond to customers turning to AI to optimize their finances. From a report: The consultancy firm predicted that customer uptake of agentic AI -- effectively autonomous bots -- would hit the profits banks earn from customer money in low interest accounts, according to a report from McKinsey published Thursday. 'Imagine you have an AI agent that says: 'Hey, you could save $2,000-a-year by moving your money,'' Pradip Patiath, a senior partner at McKinsey, said. 'It automates a lot of the inertia that is in the system today.'

Consumers hold $23 trillion out of a total of $70 trillion in accounts with close to zero interest rates, while the remainder is held in accounts that often pay relatively low rates, according to the research. Customer use of AI agents could lead to a 9% profit drop for banks, some $170 billion, if they do not change their business models. That could push average returns for banks below their cost of capital, the consultants said.

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