Fears of a regional AI bank run aren’t totally overblown

Some lawmakers in the United States are worrying about the prospect of an “agentic bank run” after a firestorm on X engulfed AI fanbois and doomers alike — and bankers in MENA need to keep their eye on the story.

BACKGROUND- The brouhaha was prompted by a 27 September note from Apollo chief economist Torsten Slok, who sketched out a world in which robots independently move savers’ cash to different vehicles to earn a better return.

The outcome could speed outflows of deposits from traditional banks, which typically offer lower interest rates for savers, and toward fintechs that offer higher rates. The outflows could force banks to raise the rates they offer depositors — and price up what they charge borrowers. In a nightmare scenario, an agent could theoretically spark a run on a bank.

An agentic bank run is (probably) a long way away. There’s no telling how quickly the average citizen is likely to turn something as important as his savings over to the AI overlords — but probably not too soon.

But there’s a slow-bleed version of this that banks should start worrying about — especially in our corner of the world.

In Egypt, banks are already competing with fintech upstarts for deposits. Granite, for example, gives individuals and companies access to a money-market fund with daily subscriptions and redemptions. Thndr started life as a stock-trading app (it now accounts for c. 20% of total trading value on the EGX) and now offers a suite of products including money-market funds.

“The product was there,” Thndr co-founder and CEO Ahmad Hammouda tells EnterpriseAM, referring to money-market funds. Thndr’s contribution was making it “easy and accessible.” Money-market funds can give savers a better return than traditional accounts, he argues, without the long lock-up periods associated with high-yield certificates of deposit that have been big in Egypt for years as it claws its way out of an economic crisis.

Thndr’s growth woke some Egyptian bankers to the competition that could come from fintechs as more of them get their acts together, two senior bank treasury executives tell us. The company’s fund assets under custody have rocketed to EGP 45 bn (USD 860 mn), held by more than 800k investors, the company said in September.

The clouds: “We will lose some deposits to fintech players,” a C-suite exec at a leading national bank tells us, emphasizing the word “some.”

And maybe a rainbow? “But right now all of these guys need a bank — someone needs to hold their funds for them. And they need us for securitization, their lifeblood,” the exec says.

But remember: Money that finds its way back to a bank through a fintech won’t come back at the same value — or stay put for as long.

And the agents may not be far behind? Thndr’s Hammouda is already preparing for an agentic future. An upcoming iteration of his product would remember what clients tell it about their finances and investing goals and offer monthly recommendations for how to bring their assets back to an agreed mix of stocks, mutual funds, deposits, etc. That’s not an agent moving money without your permission, but it’s not too many steps away.

A glimpse of the future: Some customers in the UAE can already initiate a bank payment through another company’s app. The UAE’s payment standards include provisions that make it possible to automatically move money from a current account at Bank A to a savings account at Bank B — not conceptually too far from Slok’s agentic future.

WHAT TO WATCH FOR in the near term: Industry observers should keep an eye on tech spending at regional banks. The threat of clients switching to fintechs could convince some long-complacent institutions to finally get serious about improving product and customer experience.