JPMorgan: AI disruption will spur small bank mergers as costs outpace revenues

JPMorgan analysts led by Vivek Juneja warned that smaller US banks struggling to keep up with AI spending may be forced into mergers. While most banks are actively investing in AI, the technology's impact concerns drove the recent sector selloff. The analysis suggests AI creates a scale problem: smaller institutions can't afford the investments needed to remain competitive, creating consolidation pressure across the banking sector.

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