Apollo's Torsten Slok Warns AI Agents May Spark Bank Runs

Torsten Slok cautions that AI could shift household funds from low-yield accounts, leading to financial instability.

Torsten Slok, Chief Economist at Apollo Global, has raised alarms about the potential for AI financial assistants to instigate a gradual bank run. He suggests that these technologies may automate the process of moving household funds from traditional low-interest checking accounts to higher-yield options, which could undermine the banking sector's foundation.

With personal AI agents, such as Meta's Muse, gaining traction, Slok points out that they could facilitate the reallocation of cash to accounts offering interest rates significantly above the average 0.1% return on standard checking accounts. Financial institutions like Revolut and SoFi currently provide yields ranging from 3.3% to 5%, which could translate to a substantial increase in annual interest for consumers.

Slok warns that if households increasingly adopt AI to manage their investments, banks could be deprived of the cheap deposits they rely on for lending, jeopardizing the broader financial system. He stated, "If every household employed AI agents to maximize their cash returns, banks could lose a significant portion of the cheap deposits they need for lending, which would be problematic for the entire financial system."

The concept of agentic finance, where AI actively manages funds, is already being explored. These AI agents can monitor account balances, assess returns across various institutions, and shift funds into higher-yielding accounts while ensuring liquidity for bill payments.

Market projections for AI in financial services suggest significant growth, with estimates ranging from $7.78 billion in 2026 to $43.52 billion by 2031. The x402 protocol by Coinbase is paving the way for payment systems that allow AI agents to execute transactions in stablecoins without human intervention.

As of now, the x402 Protocol has processed over 205 million transactions and has approximately 69,000 active agents, with major companies like Google and Visa involved in its development. Nate Geraci, co-founder of the ETF Institute, has noted that both AI and cryptocurrency technologies are reshaping traditional banking models.