Banks will soon face the dark side of AI
XLF•AI could help banks cut costs, but customer agents may move deposits to higher-yield accounts and increase pressure on fees and lending margins. Bank of America has cited $800 million in annual AI cost cuts and revenue gains, while European banks’ net interest income totaled €326 billion in 2025.
1. AI gains for banks
Banks are using AI to reduce costs and improve productivity in areas including customer service, software development, anti-money laundering, fraud checks and credit analysis. Bank of America CEO Brian Moynihan has cited $800 million in annual cost cuts and revenue gains from generative AI, against a one-time upfront cost of $400 million. Société Générale has identified up to €600 million in AI savings, while Commerzbank expects annual AI benefits of €500 million by 2030.
2. Customers may capture savings
AI tools could help customers find better deals, potentially making deposits less stable and putting pressure on lending margins and fees. U.S. banks covered by the FDIC pay an average of 0.1% on checking accounts and 0.4% on savings accounts, compared with rates of 3% to 5% offered by some financial technology firms. European lenders generated €326 billion in net interest income in 2025, around 60% of their total revenue.
3. Pressure on margins and fees
A UK savings-agent startup estimates that UK current-account balances could fall by around 80% if AI agents optimize savings after setting aside 40 days of expenses. Banks may respond with their own products to retain customers, but the article says AI could also intensify competition in wealth management and insurance. European net interest margins have risen by roughly a third since the 2021 trough, to an average of 1.63%.
