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AI scare trade pressures banks as higher rates reshape deposits

MarketWatch notes banks have still profited as some customers stick with low-interest checking accounts for convenience and fast access.

Reported · Written up by our desk · Fund Industry

In an environment shaped by higher interest rates, MarketWatch says banks have been able to earn large profits because many consumers have been reluctant to move money out of low-interest checking accounts.

The article links this deposit behavior to the broader pressure banks face as an AI-driven “scare trade” finally starts to affect the sector.

MarketWatch frames checking account convenience and ready access to funds as key reasons customers have not shifted balances as much as banks otherwise might have expected.

The report suggests the market’s evolving concerns around AI exposure are now intersecting with bank deposit dynamics, with implications for how banks manage profitability in the current rate regime.

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