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Altruist’s AI Tax Planner Triggers Wealth Management Selloff

Altruist launched Hazel AI Tax Planning on February 10th, and the wealth management sector immediately had a bad day. The tool automatically analyzes tax documents—1040s, pay stubs, account statements, and spits out personalized tax strategies in minutes, which apparently spooked investors enough to hammer the stocks: Charles Schwab down 7%, LPL Financial down 8%, Raymond James down 8%, Ameriprise down 6.2%, Morgan Stanley down 2%. The market’s basically pricing in the fear that AI-first startups are going to automate away the high- value advisory work that justifies those fat fees. Whether that actually happens or not, the kneejerk reaction tells you where investor sentiment is right now.

Sources: Wealth Mangement

AI Disruption Doubts Meet Startup Momentum

Not everyone’s buying the disruption narrative. Analysts at Citizens and Morningstar are making the case that relationship-driven businesses with significant capital requirements have durable competitive moats, translation: your local financial advisor isn’t getting replaced by a chatbot tomorrow. But here’s the thing: while the analysts are talking about moats, companies like Robinhood and Public are quietly making headway with tech-enabled, low-cost offerings that appeal to younger customers who don’t particularly care about handshakes and golf outings. So maybe the disruption is slower than the panic suggests, but it’s not exactly theoretical either.

Sources: Morningstar

BNY Mellon’s Non‑Human Workforce Hits 134

BNY Mellon now has 134 “digital employees” working around the clock, and its human headcount has dropped from 53,400 in 2023 to 48,100 today. The bank’s spending $3.8 billion on technology, 19% of revenue, the highest ratio among large U.S. banks and Goldman Sachs research estimates this could boost earnings per share by 19%. They’ve also put all 48,000+ remaining employees through 10 hours of training on their Eliza AI platform, which suggests they’re serious about this not just being a cost-cutting exercise but an actual operational transformation. Whether those “digital employees” are doing grunt work or genuinely complex tasks is the real question, but the scale of the bet is undeniable.

Sources: CNBC

US banks wrestle with regulation amid rising AI spend

U.S. banks are leading their global peers in artificial intelligence adoption, with 65% of AI use cases actively deployed compared to 61% worldwide, according to a Finastra report. A significant share (42%) of U.S. financial firms plan to increase AI investments by more than 50% this year, showing continued momentum toward modernization. However, half of U.S. executives say regulatory and compliance challenges are significant barriers to scaling AI efforts, higher than the global average, highlighting how data sovereignty concerns and compliance priorities can slow technological progress. Talent and skills gaps are also seen as obstacles, particularly in the U.S. compared with other regions. Industry initiatives like the Common Controls for AI Services aim to help define standardized AI governance and support secure adoption.

Sources: BankingDive

Bretton AI Raises $75M to Scale Compliance Tech

Bretton AI (formerly Greenlite) just closed a $75 million Series B led by Sapphire Ventures, with Thomson Reuters Ventures and TIAA Ventures jumping in. They’re building AI agents for KYC, KYB, AML, sanctions screening, and transaction monitoring, basically all the compliance grunt work that banks hate paying humans to do. Their client list includes banks regulated by the OCC, FDIC, and Federal Reserve, plus fintechs like Robinhood, Mercury, and Gusto. The numbers are striking: they’ve saved clients over $10 million in compliance headcount, eliminated 195,000+ hours of manual work, and completed 1.2 million+ investigations. Average contract value jumped from $25K to $201K, which tells you this isn’t just automation, it’s mission-critical infrastructure.

Sources: PYMNTS

Don’t blink—the banking Singularity is accelerating.

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