Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Really happy to say
Speaker 1: that joining me right now is JP Morgan, CEO of
Speaker 1: Asset Management and Wealth Management, Mary Rudos. Good to have
Speaker 1: you here with us. It's been a really busy a
Speaker 1: couple of days, and actually we're only day one of FII,
Speaker 1: but JP Morgan was here on Sunday. You were celebrating
Speaker 1: your ninety year anniversary in Saudi Arabia, and I've got
Speaker 1: to say, for those who are unfamiliar with Saudi Arabian
Speaker 1: history even before oil was discovered.
Speaker 2: Absolutely, I'm so happy to be here with you. And
Speaker 2: if you all could only see the crowds of people
Speaker 2: that are here, nine thousand delegates here in Riod for
Speaker 2: the FII. It's a really exciting time period, but it's
Speaker 2: even more exciting for JP morgan ninetyeth year anniversary celebration
Speaker 2: with all of the ministers and important heads, minister of
Speaker 2: different sectors and the like. But it is incredible to
Speaker 2: think that ninety years ago we were facilitating gold payments
Speaker 2: and moving it here into the region before oil was
Speaker 2: even discovered, and the journey that we've been on with
Speaker 2: all of our partners here. It was great to see
Speaker 2: at the JP Morgan event that we had on Sunday
Speaker 2: night to celebrate so many of the ministers said I
Speaker 2: was trained by the JP Morgan credit training program back
Speaker 2: in the day, and so we're very proud of that
Speaker 2: and our partnership that we've had for so many years.
Speaker 1: Quite the evolution for both JP Morgan and of course
Speaker 1: for the country as well. Now we talk about diversification
Speaker 1: away from oil, but you sent an opportunity ninety years ago.
Speaker 1: Now there are so many banks coming to the region.
Speaker 1: It's becoming a lot more competitive. How do you hold
Speaker 1: on to your market share and competes versus all of
Speaker 1: the other international banks this market shap It's.
Speaker 2: Competitive everywhere in the world, and it's increasingly competitive here.
Speaker 2: We're very proud we have four hundred and thirty people
Speaker 2: in the region. We just this week named riad as
Speaker 2: our global headquarters for the region here, so we're very
Speaker 2: excited about what that means for the opportunity. But you know,
Speaker 2: we've soitate inbound and outbound payments, investments, all of the
Speaker 2: things that make the world go round, and we work
Speaker 2: very hard and it takes very long term time to
Speaker 2: make these partnerships and develop the trust and so to
Speaker 2: think about not just one industry, but many industries, to
Speaker 2: go through hiccups, to ride through good times and bad times,
Speaker 2: and you know that's what makes these relationships.
Speaker 1: And as these countries have matured and grown very quickly,
Speaker 1: what you have seen as an accumulation of wealth. So
Speaker 1: wealth management is also a big focus for many banks.
Speaker 1: Are you have a huge influx as well of ultra
Speaker 1: HIH net worth individuals that again are adding to this cycle.
Speaker 1: Would you say that wealth management investment priorities in this
Speaker 1: part of the world are different from other gyal difference.
Speaker 2: No different. You know, everybody has a home country bias.
Speaker 2: We can't get away from it depending on where we live.
Speaker 2: But everybody sees the opportunities. And if you just show
Speaker 2: up at FII for a couple of days, all the
Speaker 2: opportunities are here. Every major asset managers here, everyone's talking
Speaker 2: about that opportunities. Many discussions on AI as you know,
Speaker 2: but everything from energy to on shoring, reshoring, manufacturing and
Speaker 2: all the different opportunities that exist.
Speaker 1: Yeah, let me ask you about some signals that are
Speaker 1: coming through from the US economy. Obviously we have the
Speaker 1: FED meeting coming up to more of their widely anticipated
Speaker 1: to cut interest rates, but CEO Dab Diamond a couple
Speaker 1: of weeks ago was talking about there being potentially other
Speaker 1: call approaches in the credit market, something to be alert to.
Speaker 1: How do you see the signals coming through right now?
Speaker 2: Yes, well, I mean we stress test the portfolio of
Speaker 2: investments that we make with our own balance sheet as
Speaker 2: well as our clients balance sheets each and every day,
Speaker 2: and you have to do that, especially when you get
Speaker 2: to top B levels in all of these markets of
Speaker 2: which we've had. We haven't had a correction in a
Speaker 2: long time. We haven't had a recession in a long time,
Speaker 2: and so the closer you get to that time period,
Speaker 2: nobody knows when it is. You have to make sure
Speaker 2: that the clients and the balance sheet of whether it's
Speaker 2: an individual well an institution of sovereign wealth fund or
Speaker 2: our own bank is able to sustain that. And so
Speaker 2: when we stress tests that we look for, you know,
Speaker 2: what are the little even micro signs of what might
Speaker 2: be going wrong. And that's that's our job that you know.
Speaker 2: JP Morgan prides itself on fortress balance sheet. We want
Speaker 2: to be there in good times and bad for our clients,
Speaker 2: and so we need to make sure that we're able
Speaker 2: to have the cash ability to help clients as they
Speaker 2: as they ride through those times. And there aren't major signs,
Speaker 2: but you're seeing, you know, little pockets of it. You
Speaker 2: see a little amending extend on credit terms and the like,
Speaker 2: and so we're watching it, and we're watching it very closely.
Speaker 1: Yeah. How are you feeling about twenty twenty six? Again?
Speaker 1: I started this off saying the federabout to cut interest
Speaker 1: rates again? Yes, how do you see the momentum going
Speaker 1: in to twenty twenty six? Because most recent results obviously
Speaker 1: quite positive. Can the momentum continue?
Speaker 2: Yes? I mean we should be seeing more inflation than
Speaker 2: we are. There's a lot of things. Remilitarization should be inflationary,
Speaker 2: Tariffs should be inflationary. It hasn't cut through the system
Speaker 2: as much as you would have thought, and so you're
Speaker 2: getting interest rate cuts that's very bullish for the economy.
Speaker 2: You're getting a lot of reinvestment that's very bullish for
Speaker 2: the economy. And so I think twenty twenty six is
Speaker 2: setting itself up to be another great year. Just you
Speaker 2: have to pick your pockets, you have to risk manage,
Speaker 2: you have to make sure that the things that have
Speaker 2: ridden up so well, have you right sized them? Have
Speaker 2: you trimmed them to be in the in the in
Speaker 2: the pocket of the portfolio that they should be.
Speaker 1: So you mentioned artificial intelligence earlier, I do want to
Speaker 1: ask you whether you are actually seeing a reternal investment
Speaker 1: by introducing AI into your operations. And then also you
Speaker 1: know whether actually their schooled for AI to replace people's jobs,
Speaker 1: especially junior and analyst level.
Speaker 2: Yeah, you know, I mean AI is a lot of
Speaker 2: people have said, is there an AI bubble? I said,
Speaker 2: that's like asking if there's a computer bubble. It's not
Speaker 2: really a thing. AI is a new way of working
Speaker 2: and it's a really important factor in all investments that
Speaker 2: people make in all companies, especially JP Morgan. You know,
Speaker 2: we spend a lot of time on it. As you know,
Speaker 2: we spend eighteen billion dollars on technology a year and
Speaker 2: we're on the forefront of many things, whether it's AI,
Speaker 2: quantum computing and the like. But for us, it's about
Speaker 2: deploying it in a way that you rethink how you
Speaker 2: do things in the organization. Can you do it faster, better,
Speaker 2: cheap or quicker smarter? Can you catch the errors? Can
Speaker 2: you protect the clients, can you make sure that the
Speaker 2: cyber defenses are even stronger than they would be. But
Speaker 2: if you look at SMP five hundred companies, only about
Speaker 2: ten percent of them say that they actually have AI
Speaker 2: in their products and services out there. And if you
Speaker 2: look at the mentions of AI when you talk about
Speaker 2: quarterly earnings or even just our own investment managers going
Speaker 2: and meeting for the different management teams out there around
Speaker 2: the world and all the companies, it's only about forty
Speaker 2: to fifty percent of international companies. The good news is
Speaker 2: it's even higher in the US about seventy percent, and
Speaker 2: that will trickle through. And it's just like how we
Speaker 2: see it in our own company. You start with fixing
Speaker 2: the no joy, you know, get rid of all the
Speaker 2: nojoy work, try to get AI to optimize those kind
Speaker 2: of things, and then over time you realize you have
Speaker 2: to stop the way you're doing all things and rethink
Speaker 2: entire processes and procedures. Why am I optimizing ten steps
Speaker 2: when I maybe should have just gone from step one two,
Speaker 2: step ten and removed everything in between.
Speaker 1: Ultimately, do you see AI as a massive cost of flator?
Speaker 1: Is that how you're thinking about it? From a business perspective.
Speaker 2: It could be a cost of flator, but it should
Speaker 2: be just a great efficiency gain and the better you
Speaker 2: can do things and the better products and services, and
Speaker 2: they're tailored just to you. I know exactly what you
Speaker 2: want on which day, what you've been waiting for, what
Speaker 2: you're nervous about, and how do I customize that, and
Speaker 2: how do I do that at scale? And when I
Speaker 2: can do that with AI? And if I have curious talent,
Speaker 2: that's all you need is curiosity and a little AI,
Speaker 2: and you can go very far in making the right
Speaker 2: products and services for the clients of the future.
Speaker 1: Yeah. Ultimately, though, do you see some of these jobs,
Speaker 1: as I mentioned, at those entry level jobs being replaced
Speaker 1: by AI?
Speaker 2: Not at all. Somebody earlier today said, yes, a lot
Speaker 2: of jobs will revis I totally disagree with that. I
Speaker 2: think the jobs that will be replaced are those for
Speaker 2: the people that are not curious, for the people that
Speaker 2: are not using AI, for the people that don't say,
Speaker 2: how do I rethink this? How do I dig in deeper?
Speaker 2: And so every time you get to think about using
Speaker 2: the technology that's at your fingertips and figuring out you
Speaker 2: know how many times did you mention something last week
Speaker 2: when I was watching you on late night Bloomberg TV,
Speaker 2: which I do every night of my life, and it's
Speaker 2: a great and it's a great joy to hear all
Speaker 2: the things that you're covering, and you say to yourself, well,
Speaker 2: if I could just plug that in and if I
Speaker 2: could have it summarize what you're saying every night for me,
Speaker 2: and I could think about how I'm going to apply that,
Speaker 2: and then I take those vast streams of information. That's
Speaker 2: all you need. You need curiosity, and you need great
Speaker 2: people to do it. So I don't think it's a
Speaker 2: job destroyer for those kind of people. I think it's
Speaker 2: a job destroyer for the people that are waiting and
Speaker 2: fearful that it is going to take over their job.
Speaker 1: Mary, thank you so much,