Apollo Warns AI Could Trigger a 'Bank Run' by Shifting Deposits Away from Traditional Banks
The financial industry is facing growing concerns over how artificial intelligence (AI) could disrupt traditional banking models. Apollo Global Management's chief economist, Torsten Slok, warns that if households begin using agentic AI tools to optimize cash returns, banks may lose a significant portion of their low-cost deposits—critical for lending and profitability. This potential shift is already pressuring bank stocks as the Invesco KBW Bank ETF (KBWB) has fallen 5.7% this month on its worst performance since March 2025. Higher interest rates are also contributing to the decline, with U.S. Treasury yields reaching multiyear highs due to expectations of continued Federal Reserve tightening. Banks like Goldman Sachs and Morgan Stanley have seen losses exceeding 8%, while fintech platforms such as SoFi offer much higher deposit returns than traditional banks' average yield of just 0.1%. Although no immediate bank run is evident, the long-term implications for banking models remain a concern. Slok highlights that AI-driven tools like Muse could automate money transfers into high-yield accounts offered by fintechs, further pressuring banks to improve their offerings or risk losing deposits.
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Topics: AI impact on finance banks ETF performance interest rates