When Siri Becomes a Deposit Broker

Abstract

In the near future, individuals and nonfinancial firms will use Generative Artificial Intelligence to execute everyday tasks. In addition to drafting emails and making dinner reservations, users may deploy "GAI agents" like Siri or Gemini to pay their bills, recommend financial products or manage investment portfolios, and perform myriad other financial activities. Although users may receive benefits from their GAI agents offer financial services, these applications pose significant risks to both the customers and the financial system: They may fail to act in users' best interests, engage in market manipulation, and cause financial instability. When used by retail depositors and investors for financial services, GAI agents can, for example, cause trading losses that affect users' retirement savings. When used by businesses for treasury management, GAI agents can cause banks to run.

This essay argues that U.S. regulators are unprepared for technology firms to use open-finance and GAI architecture to provide individualized financial services without human interaction, using the risks posed by GAI agents acting as deposit brokers as an example. It will explain how the banking agencies lack authority to directly regulate deposit brokers and discuss the potential risks to financial stability and consequences for the general public.

Keywords: generative artificial intelligence, deposits, open finance, deposit broker