Bloomberg Audio Studios, Podcasts, Radio News. Really happy to say that joining me right now is JP Morgan, CEO of Asset Management and Wealth Management, Mary Rudos. Good to have you here with us. It's been a really busy a couple of days, and actually we're only day one of FII, but JP Morgan was here on Sunday. You were celebrating your ninety year anniversary in Saudi Arabia, and I've got to say, for those who are unfamiliar with Saudi Arabian history even before oil was discovered.
Absolutely, I'm so happy to be here with you. And if you all could only see the crowds of people that are here, nine thousand delegates here in Riod for the FII. It's a really exciting time period, but it's even more exciting for JP morgan ninetyeth year anniversary celebration with all of the ministers and important heads, minister of
different sectors and the like. But it is incredible to think that ninety years ago we were facilitating gold payments and moving it here into the region before oil was even discovered, and the journey that we've been on with
all of our partners here. It was great to see at the JP Morgan event that we had on Sunday night to celebrate so many of the ministers said I was trained by the JP Morgan credit training program back in the day, and so we're very proud of that and our partnership that we've had for so many years.
Quite the evolution for both JP Morgan and of course for the country as well. Now we talk about diversification away from oil, but you sent an opportunity ninety years ago. Now there are so many banks coming to the region. It's becoming a lot more competitive. How do you hold on to your market share and competes versus all of the other international banks this market shap It's.
Competitive everywhere in the world, and it's increasingly competitive here. We're very proud we have four hundred and thirty people in the region. We just this week named riad as our global headquarters for the region here, so we're very
excited about what that means for the opportunity. But you know, we've soitate inbound and outbound payments, investments, all of the things that make the world go round, and we work very hard and it takes very long term time to make these partnerships and develop the trust and so to think about not just one industry, but many industries, to go through hiccups, to ride through good times and bad times, and you know that's what makes these relationships.
And as these countries have matured and grown very quickly, what you have seen as an accumulation of wealth. So wealth management is also a big focus for many banks. Are you have a huge influx as well of ultra HIH net worth individuals that again are adding to this cycle. Would you say that wealth management investment priorities in this part of the world are different from other gyal difference.
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 managers here, everyone's talking about that opportunities. Many discussions on AI as you know, but everything from energy to on shoring, reshoring, manufacturing and all the different opportunities that exist.
Yeah, let me ask you about some signals that are coming through from the US economy. Obviously we have the FED meeting coming up to more of their widely anticipated to cut interest rates, but CEO Dab Diamond a couple of weeks ago was talking about there being potentially other call approaches in the credit market, something to be alert to. How do you see the signals coming through right now?
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 B 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 well an institution of 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 amending extend on credit terms and the like, and so we're watching it, and we're watching it very closely.
Yeah. How are you feeling about twenty twenty six? Again? I started this off saying the federabout to cut interest rates again? Yes, how do you see the momentum going in to twenty twenty six? Because most recent results obviously quite positive. Can the momentum continue?
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 twenty twenty six 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 ridden up so well, have you right sized them? Have you trimmed them to be in the in the in the pocket of the portfolio that they should be.
So you mentioned artificial intelligence earlier, I do want to ask you whether you are actually seeing a reternal investment by introducing AI into your operations. And then also you know whether actually their schooled for AI to replace people's jobs, especially junior and analyst level.
Yeah, you know, I mean AI 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, especially JP Morgan. You know, we spend a lot of time on it. As you know, we spend eighteen billion dollars 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, cheap or quicker smarter? Can you catch the errors? Can you protect the clients, can you make sure that the cyber defenses are even stronger than they would be. But if you look at SMP five hundred companies, only about ten percent 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 forty to fifty percent of international companies. The good news is it's even higher in the US about seventy percent, 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 nojoy 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 optimizing ten steps when I maybe should have just gone from step one two, step ten and removed everything in between.
Ultimately, do you see AI as a massive cost of flator? Is that how you're thinking about it? From a business perspective.
It could be a cost of flator, but it should be just a great efficiency gain and 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.
Yeah. Ultimately, though, do you see some of these jobs, as I mentioned, at those entry level jobs being replaced by AI?
Not at all. Somebody earlier today said, yes, a lot of jobs will revis 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 it. 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.
Mary, thank you so much,