Wells Fargo is "immensely bullish" on AI... kind of
Wells Fargo, like every other bank, is in the throes of adopting AI as a means to cut costs (ergo, jobs). Speaking in its Q3 earnings call, CEO Charlie Scharf said that the bank is "immensely bullish" on the latest batch of models, despite not seeing much impact from AI on the jobs market.
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Scharf said the bank is "devoting significant management time and resources" to AI. Much of this is around AI coding capabilities; Scharf said engineers are "using it to write code faster" and have been using agentic coding tools "where appropriate." The bank has used AI to "identify as well as write and test code" to address "cybersecurity vulnerabilities", and has used AI to "accelerate response time for underwriting decisions." With automation comes a reduction in force. The bank's results showed that headcount had fallen 8% year-on-year.
Wells Fargo's observations on the broader workforce tell a different story. CFO Mike Santomassino said that Wells Fargo's commercial bank performance was aided by the fact that "wages and employment continue to be strong" and that the bank is also "not seeing signs of that changing." The bank didn't make any mention of whether AI is positively or negatively affecting wages and employment, but Santomassino said that the strong performance was true across "all of the different cohorts of clients" the bank has in terms of income and wealth level. AI driven cuts at other banks have focused on getting rid of 'lower-value human capital' which would suggest that lower income workers would be disproportionately affected. Perhaps not.
Maybe Wells Fargo is just built different. Scharf said that "thereâs this underappreciation for the benefits that those with scale have when it comes to AI." He said that, if an agent is used to replace the work of someone in a call centre, the bank can "spend the same amount of money somewhere else but deploy it more broadly." Scharf said that the bank is "focused on building a company that has higher embedded returns."
It's not just AI that's making things faster. Santomassino said that, through tokenized payments infrastructure, payments which previously took up to two days can now be done "in two minutes or less."
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