Bloomberg Host (2:45)

And so, and as these countries have matured and grown very quickly, what you have seen is an accumulation of wealth. So wealth management is also a big focus for many banks. You have a huge influx as well of ultra high net worth individuals that again are adding to this, the cycle. Would you say that wealth management, investment priorities in this part of the world are different from other. No difference.

Mary Erdoes (3:08)

No different. You know, everybody has a home country bias. We can't get away from it depending on where we live. But everybody sees the opportunities. And if you just show up at FII for a couple of days, all the opportunities are here. Every major asset manager is here. Everyone's talking about the opportunities. Many discussions on AI as you know, but everything from, from energy to onshoring, reshoring, manufacturing and, and, and all the different opportunities that exist.

Bloomberg Host (3:36)

Yeah. Let me ask you about, you know, some signals that are coming through from the US economy. Obviously we have the Fed meeting coming up tomorrow. They're widely anticipated to cut interest rates, but you know, CEO Jamie Dimon a couple of weeks ago was talking about there being potentially other cockroaches in the credit market. Something to be alert to. How do you see the signals coming through right now?

Mary Erdoes (3:57)

Yes, well, I mean we stress test the portfolio of investments that we make with our own balance sheet as well as our clients balance sheets each and every day. And you have to do that, especially when you get to top levels in all of these markets of which we've had, we haven't had a correction in a long time. We haven't had a recession in a long time. And so the closer you get to that time period, nobody knows when it is. You have to make sure that the clients and the balance sheet of whether it's an individual, an institution, a sovereign wealth fund or our own bank is able to sustain that. And so when we stress tests that we look for, you know, what are the little even micro signs of what might be going wrong. And that's, that's our job that, you know, JP Morgan prides itself on fortress balance sheet. We want to be there in good times and bad for our clients. And so we need to make sure that we're able to have the cash ability to help clients as they, as they ride through those times. And there aren't major signs, but you're seeing, you know, little pockets of it. You See a little amend and extend on, on credit terms and the like. And so we're watching it, and we're watching it very closely.

Bloomberg Host (5:00)

Yeah. How are you feeling about 2026 again? I started this off saying that the Fed are about to cut interest rates again.

Mary Erdoes (5:06)

Yes.

Bloomberg Host (5:07)

How do you see the momentum going in to. To 2026? Because most recent results obviously quite positive. Can that momentum continue?

Mary Erdoes (5:13)

Yes. I mean, we should be seeing more inflation than we are. There's a lot of things. Remilitarization should be inflationary, tariffs should be inflationary. It hasn't cut through the system as much as you would have thought. And so you're getting interest rate cuts. That's very bullish for the economy. You're getting a lot of reinvestment. That's very bullish for the economy. And So I think 2026 is setting itself up to be another great year. Just you have to pick your pockets, you have to risk manage. You have to make sure that the things that have written up so well, have you right size them, have you trimmed them to be in the, in the, in the pocket of the portfolio that they should be.

Bloomberg Host (5:48)

So you mentioned artificial intelligence earlier. I do want to ask you whether you are actually seeing a return on investment by, by introducing AI into your operations. And then also, you know, whether actually there's scope for AI to replace people's jobs, especially junior and that analyst level.

Mary Erdoes (6:05)

Yeah, you know, I mean, I. Is a lot of people have said, is there an AI bubble? I said, that's like asking if there's a computer bubble. It's not really a thing. AI is a new way of working. And it's a really important factor in all investments that people make in all companies and especially JP Morgan. You know, we spend a lot of time on it, as you know, we spend $18 billion on technology a year. And we're on the forefront of many things, whether it's AI, quantum computing and the like. But for us, it's about deploying it in a way that you rethink how you do things in the organization. Can you do it faster, better, cheaper, quicker, smarter? Can you catch the errors? Can you protect the clients? Can you make sure that the cyber defenses are, are even stronger than they would be? But if you look at S&P 500 companies, only about 10% of them say that they actually have AI in their products and services out there. And if you look at the mentions of AI when you talk about quarterly earnings, or even just our own investment managers going and meeting for the different management Teams out there around the world and all the companies. It's only about 40 to 50% of international companies. The good news is it's even higher in the US about 70%. And that will trickle through. And it's just like how we see it in our own company. You start with fixing the no joy, you know, get rid of all the no joy work, try to get AI to optimize those kind of things. And then over time, you realize you have to stop the way you're doing all things and rethink entire processes and procedures. Why am I optimistic, optimizing 10 steps when I maybe should have just gone from step one to step 10 and removed everything in between?

Bloomberg Host (7:37)

Ultimately, do you see AI as a massive cost deflator? Is that how you're thinking about it from a business perspective?

Mary Erdoes (7:43)

It could, it could be a cost of flavor, but it should be just a great efficiency gain. And the, the better you can do things and the better products and services and they're tailored just to you. I know exactly what you want, on which day, what you've been waiting for, what you're nervous about, and how do I customize that and how do I do that at scale and when I can do that with AI and if I have curious talent, that's all you need is curiosity and a little AI and you can go very far in making the right products and services for the clients of the future.

Bloomberg Host (8:14)

Yeah. Ultimately though, do you see some of these jobs, as I mentioned, those entry level jobs being replaced by AI?

Bloomberg Audio Studios Announcer (8:23)

Not at all.

Mary Erdoes (8:24)

Somebody earlier today said, yes, a lot of jobs will replace. I totally disagree with that. I think the jobs that will be replaced are those for the people that are not curious, for the people that are not using AI, for the people that don't say, how do I rethink this? How do I dig in deeper? And so every time you get to think about using the technology that's at your fingertips and figuring out, you know, how many times did you mention something last week when I was watching you on late night Bloomberg tv, which I do every night of my life, and it's a great, and it's a great joy to hear all the things that you're covering and you say to yourself, well, if I could just plug that in and if I could have it summarize what you're saying every night for me and I could think about how I'm going to apply that. And then I take those vast streams of information. That's all you need. You need curiosity and you need great people to do so. I don't think it's a job destroyer for those kind of people. I think it's a job destroyer for the people that are waiting and fearful that it is going to take over their job.

Bloomberg Host (9:21)

Mary, thank you so much.

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