Bank shares shed $22bn on AI password scare

Within hours of an Axios report that bank customers were giving AI agents access to their accounts — a violation of most banks’ terms of service — the combined market value of JPMorgan, Morgan Stanley, Wells Fargo, Citi, and Bank of America tumbled $22.8 billion.

By the opening bell yesterday, JPMorgan had seen more than $7 billion erased from its value, while Wells Fargo lost $4 billion.

Customers are sharing their passwords and login details with AI systems, a practice banned by most banks. The sight of bots trying to start genuine cash transfers rattled investors.

Axios further noted that some bots acted without a corresponding customer command, and a few even placed calls to banking help desks.

Banks caution against ceding account access to AI

Although share prices clawed back some of the opening losses by the end of the business day, they did not fully recover.

Morgan Stanley opened 1.9% lower and remained 1.6% lower at the close. Citi gapped down 1.3% and ended 1% behind.

“Customers should not give their username and passwords to anyone. We support secure, customer-authorized data sharing through open banking providers to meet customers’ needs while keeping their accounts safe,” a Chase spokesperson said.

Wells Fargo stated it had implemented measures to block unauthorized agents from accessing customer accounts.

Trade publication American Banker corrected its story that had incorrectly claimed Morgan Stanley suffered an AI breach, but the denial from the bank’s spokesperson did little to help its stock price recover yesterday.