Okay, so, good afternoon, everybody. We're going to start with our next presentation. Delighted to have Marianne Lake, CEO of the Consumer and Community Banking business at JPMorgan Chase. She's also a member of the Operating Committee. CCB, I had written it serves more than 85 million consumers, but I actually think since I wrote this, you've added another million, so it's 86 million, and 7 million small businesses. Marianne has been a very regular attendee at this conference, first as CFO and then as head of CCB. It's great to have you back and.
Great to be here.
Get your updated views on what's going on. Maybe we can just start off with a discussion about the state of the consumer, the state of the U.S. economy. I think all the data points seem to indicate that the U.S. consumer is pretty healthy, but there does seem to be this ongoing divergence in spend trends versus high-end versus low-end. You know, so maybe you can talk a little bit about that. You know, has that divergence grown or is it narrowing? And then can you talk a little bit about what you're seeing from just a spending standpoint and talk a little bit about the 2026 economic outlook?
Okay, there's a lot, so I'll just start with the data when you look at our customers, and remember, while you know we may skew a little more affluent, as we said, we bank 86 million consumers, and so we have you know a full spectrum of customers in our portfolio, and it is true that as we look at our data right now today, the consumer and small businesses both continue to be resilient. They continue to be healthy. The metrics continue to demonstrate that, whether it's cash buffers, which have normalized but are also stable, whether it's credit metrics really across asset classes, and we can talk about that a bit later. Spend trends, payment rates, you know, the metrics themselves are underlying you know really quite healthy.
And so, you know, as I think about the concerns that people are worried about, they're also true, right? It is also true that the labor market and demand for labor is weakening. It is true that consumer sentiment is quite low and that absolute price levels are high. It is true that auto subprime auto delinquencies have been high through the pandemic, even as they are improving, and that has caused concern. And, you know, the K-shaped economy narrative, it doesn't have no merit, right? It's not, it's running a little ahead of the data, but I think the thing to remember is that we've been talking for the last three years about the fact that cash buffers are normalizing. And what that means, like mathematically, is that people have been spending more than they have been bringing in for some period of time.
And so when you reach the point of normal, right, when you get back to the levels of cash that is required for people to sort of maintain, then it requires there to be adjustments to spending patterns. And so it is not entirely inconsistent to be able to say that people are still treading water, that the cash buffers are stable and that spend is still solid. But it is also true that retailers and restaurants are seeing people be more discerning, trading down a little, being more promotion aware, because there have to be in order to bring those things back into balance. And so the good news is that so far, even our lower-income customers are continuing to tread water and, you know, and stability is more of the narrative than sort of deterioration or anything else.
What is also true, regrettably, is that at any moment in time, there are people who are in financial distress, right, and that is true today, but that cohort of individuals is not materially elevated relative to more normal times, and so as we look at the data right now, the data looks good. Consumers look resilient, small businesses look resilient, but there's less capacity to weather an incremental stress because cash buffers have normalized and price levels absolutely are high, even as inflation is, you know, has come down at least, so I would just say that I would characterize the environment as being a little bit more fragile, and, you know, as the labor market goes, typically so will consumers. Our outlook for next year would be for unemployment to grind a little higher and therefore that to be reflected in consumption.
And from there, it will depend. We could continue to have a resilient consumer for, you know, a few months. It could be for longer, but there's less capacity to withstand a stress. Spend is solid. I mean, spend in the fourth quarter improved a little year- over- year and relative to the first three quarters of this year. And that's true across income bands. Yes, there is a divergence in spend growth between higher-income customers and lower-income customers, but that relative level of spend growth is a sort of relatively normal trend. And so it's not diverging, nor is it narrowing. It looks pretty normal. And so, you know, I don't want to discount the concerns. They are real. And, but the data is good for right now.
Let me ask a couple of follow-on questions. The first is, is there anything of note in early-stage delinquencies that you've seen? And then the second is, look, why do you think we're hearing some of these warning signs from retailers and restaurants which don't seem to be reflected in the banking spend or credit data? What, why do you think that narrative is being percolating?
Okay, so on credit trends, I would say, you know, again, like nothing new really to see on the credit trends. If I look at Card, you know, early roll rate into delinquency, they're stable. In fact, 30+ delinquencies have been improving, you know, year- over- year for the last 10 months or so. You will have seen that we adjusted our expectations for charge-offs in 2025 down, in the second half of the year, which we can talk about a bit later, but reflecting the fact that we've now, you know, seen more clearly the effect of the pandemic and delayed charge-offs, peak and rollover. And so we have more confidence that actually the trends going forward from here are going to look more normal. It's not a little better than we had previously expected.
And so whether it's, you know, roll rates, minimum or low payment rates, you know, credit trends in the Card business look, you know, pretty good right now. And I always want to touch on wood, but I won't do that. And then auto is another one where, you know, there was a lot of anxiety about auto delinquencies, subprime auto delinquencies. And, you know, there were across the industry a couple of pretty negatively selected vintages in 2022 and 2023, you know, when rates were high, you know, used car prices were elevated. People who were borrowing, you know, for that purpose needed to do it. We have seen that rollover too. And so as we look at the vintage performance, you're seeing the 2022 and 2023 vintages now normalize. The 2024 and 2025 vintages are looking much more normal.
You know, so I again, you know, and if you look at people, you know, the normal payment hierarchy in, you know, applies. So people are likely to go delinquent on their credit card before on their car, on the basis that they need their cars to get to work, et cetera. So an early leading indicator would be look at those subprime auto borrowers who also have a credit card. And are we seeing elevated delinquencies there? And we are not yet. So again, you know, I'm not suggesting that there's no fragility. I'm just saying that what we're, what everyone was worried about, what we were describing as a couple of negatively selected vintages and some impacts of pandemic do appear to be playing out now. And we're seeing both charge-offs and delinquencies trend down.
You know, Home Lending is trending up a little, but from such a low base, it's hard to stress that portfolio.
And then just briefly on the small business side, it's nine months, obviously, since Liberation Day impacted tariffs. Anything to note on early delinquencies there?
No, actually. And, you know, I know that, so obviously the tariff situation has panned out to be not as, you know, as significant, certainly significant, please don't get me wrong, but not as significant as, you know, initially worried. You know, various different businesses are adjusting in various ways, you know, whether it's passing on some, absorbing some through margin, re-engineering supply chains, being cautious about investments and hiring. And on the whole, I think keeping, you know, themselves in pretty good shape so far.
Okay. So if you pull together all the pieces on credit, I mean, what is your assessment on the trajectory of charge-offs, you know, across both Card, but also the broader portfolio heading into next year?
So, for charge-offs for us, you know, at Investor, you would have seen that we gave a range, you know, and obviously all these ranges are scenarios, not really outlooks, and they're macro environment dependent, and the macro environment never pans out exactly as you expected. And so we had thought that our charge-offs this year would come in around 3.6% for credit card, with, you know, an appreciable risk of it going a bit higher if unemployment were to, you know, quickly deteriorate, which did not happen.
In fact, as I said, we're actually expecting charge-offs now to be about 3.3%, a combination of a better macro environment, but also the fact that we are, you know, clearer about the impact of delayed charge-offs and feeling pretty good about the underlying financial health of the borrowers in our portfolio, which means if you look forward, just think about that as the starting point is call it shifted lower 30 basis points. So you know, if we are approaching an environment that remains relatively benign, that would be the starting point you would expect into 2026. Then if unemployment deteriorates and we see it hit the high fours, then it could be, you know, 3.6%. So just we had a range of 3.6%-3.9% for next year. Just think about it as having shifted down given our current outlook for 2026.
Across the rest of the portfolio, I would say, you know, the charge-offs are, you know, stable to modestly improving. I talked a bit about what we're seeing in delinquencies in auto. That is obviously over time having a natural consequence on auto charge-offs, and so that's, you know, modestly favorable year- over- year, and, you know, as I, as I've talked about before, Home Lending, you know, has been a profit center for a while, so, it's, you know, plus or minus not relevant to the story.
Okay. So before we talk about some of the more strategic initiatives, let's talk about the current quarter. You mentioned you used to be the CFO, I, you know, so, maybe you can give us an update on trading, Investment Banking. Obviously, we had the government shut down this quarter. I think that did have an impact certainly on some of the U.S. businesses. So maybe you can talk about, you know, how those are shaping up for the quarter.
Yeah. So I can, I can do that for you. You know, I won't give you huge amounts of color context, but you'll get that with Jeremy for earnings. And, and I will tell you, obviously, with all the normal health warnings that the quarter isn't over and, you know, and things can obviously evolve and change that we're expecting fourth quarter IB fees to be up low single digits year- over- year and fourth quarter Markets revenue to be up low teens year- over- year at this point. So, you know, more to come at earnings on that. I do just want to, if you don't mind, will you humor me if I want to talk about expenses for a moment?
Yeah. No, I was going to ask because I think you did mention, or Jeremy mentioned on the third quarter call that you did think that expenses were going to be a little bit different to consensus. So if you could talk a little bit about that, that would be helpful.
Sure. So, Jeremy mentioned that consensus was a little low and, you know, we have seen it move up slightly since third quarter. I just want to be sort of kind of clear with you guys that, you know, we finished, largely finished, I would say, you know, our second round of budgeting for 2026. I think we have a reasonable line of sight, obviously, you know, dependent on, on scenarios and everything else, but we're expecting our expenses for the full firm next year to be $105 billion, and so we just want to be clear about that. Obviously, you know, things can change. CCB is a big part of that expense growth. So we drive a lot of that growth and I feel great about the expense outlook for CCB.
I want to explain it to you in like three buckets that hopefully will make it you know clear and digestible. Those themes that I'm going to talk about for CCB are extensible across the whole firm you know plus or minus you know different percentages. The biggest bucket of growth for us in expense is volume and growth-related expenses which to me are high-quality expenses associated with you know our growth strategies and outperforming things like performance incentive compensation for advisors or the product marketing expense as we are refreshing Cards and having people engage more strongly on them or auto lease which as you know gets grossed up in terms of accounting and has a meaningful impact on expense when we see outsized growth which we have and expect to continue into 2026. The biggest driver for us is growth and volume-related.
The second biggest driver, which is not quite as high, but close to that. So think about it as not quite a third, a third, a third, but the second biggest driver is our strategic investments, which will be incredibly familiar to you. They have very predictable and strong returns. That's all the things that we have been talking about and I'm sure we will talk about, like building branches, adding bankers, adding advisors, investing in acquisition marketing, refreshing branches, investing in AI, in customer features and technology, refreshing new products, all of those things that we know how to do. We know what they deliver. We're very confident in that we would do as much responsible strategic investment as we could profitably and responsibly do.
And then the third bucket, which is the smallest, but nevertheless not, you know, not nothing, is the sort of structural consequence of inflation and, you know, real estate costs and everything else. So, you know, I say that just for the purposes of clarity for you all. CCB is a big driver. Thematically, that's what's driving our growth. We feel really great about the expenses, not just how we're investing the money, but also in the context of the performance of the business. And thematically, those themes are consistent across the company.
Okay. And I'm sure we can come and talk a little bit about some of the separate categories as we go through this. So before we do that though, maybe we can talk a little bit about deposit growth, which I think is something that people have been very focused on, especially on the consumer side. And I think it's fair to say that deposit growth on the consumer side has been slower, at least in the second half of the year than you talked about at the Investor Day. And I think some of the reasons that you gave were yield-seeking behavior persisting longer, balances per new account coming in lower. So a couple of questions. I mean, the first is, what have you seen more recently in terms of deposit flows?
Maybe you can give us an update on how we should think about deposit growth heading into next year?
Sure. Absolutely. This is one of those like no good deed goes unpunished, and we sort of give scenarios that are, you know, linked to macro environments and then they don't play out that way. People are surprised that the growth didn't play out that way. But you know, trying to catch an inflection point on deposits is like trying to catch a falling knife. So you know, at Investor Day, we were expecting, you know, four rate cuts in the year. Therefore we would expect to have seen yield-seeking behavior moderate more abruptly and, you know, have returned to modest growth. That did not play out exactly that way. So where we are right now is our deposits will be relatively stable or flat year- on- year and quarter- on- quarter, even as we continue to deliver strong and robust account growth.
But there is continued yield-seeking behavior, albeit moderating, but just not as much as we maybe would have expected. On the positive side, year to date, we're actually seeing net inflows from brokerages and online banks. So that's a good news story. But we're also being very successful in delivering flows to our investment business. And so, you know, that's coming out of the deposit and into our investments. It's part of our strategy. We're excited about it. But the net of all of those things is deposit stability, you know, through this year end instead of low single digit growth. What that means hasn't changed our long-term view on where we are right now, which is we are going to see an inflection point. It's just probably pushed out a little. I'm not going to guess which quarter it will be in 2026.
We think it's later in 2026, and therefore, as a natural consequence, you know, the growth that we expected in 2026 will be a bit lower, but remember, we also have a better margin as a consequence of higher rates. You know, it's, you know, the dynamics play out that way. Nothing has changed about our long-term view of the deposit share and, you know, our excitement about the business, but, you know, we're at an inflection point. It's pretty hard to call it.
In terms of net new accounts, just to reiterate, I mean, you're still on track for this roughly the same number of net new accounts that you were expecting, at the time of the Investor Day.
Yeah. So, you know, we're, it, the net new accounts, absolutely, so there's always puts and takes in terms of growth accounts and attrition, and we're delivering about two million net new accounts a year, and we feel pretty good about that. Our customer growth, you know, is really, really strong, so the underlying drivers are all good. The environment is not exactly what we thought it might be. I don't think we ever really promised it would be, but, you know, here we are.
Okay, so let's talk about the Card business. That's obviously been a tremendous growth.
Card business, the other side of that, basically.
The other side of it. So I think you talked about being on track for, was it 10.5 million new cards this year?
That's right. Yeah.
You know, but that was before the Chase Sapphire refresh. And by the way, I see adverts for that everywhere.
Aren't they beautiful?
Yeah. So I assume that's part of the expenses that you talked about. But what's been the response to the refresh, you know, and has it changed the growth trajectory for either accounts or fees as you think about it this year?
I'm only laughing because imagine that we actually knew we were going to refresh Sapphire when we said 10.5 million accounts, because obviously at Investor Day in May, while we hadn't actually publicly announced the refresh, clearly it was ready to go and it happened a couple of months later. So the 10.5 million accounts that we talked about at Investor Day did contemplate the refresh. We've been adding more than 10 million accounts or 10 million or more accounts in Cards every year since 2022, which is, you know, really, really strong growth. And so we are on track to deliver about 10.5 million. It's a hair shy of that right now, but, you know, we're working it, and, you know, more importantly, the refresh resonated with our customers.
And so we're very happy with the early performance of the Sapphire refresh. You know, the momentum is great. Obviously, the competitive response has been strong, but we expected that too. And by the way, we also refreshed our United co-brands . We refreshed Southwest this year. You know, Sapphire is just one of many, you know, Cards in our portfolio. And, you know, in any moment in time, there can be some that are strong and some that are less strong, but we feel pretty good about our hand going into next year. And there will be more next year also in terms of refreshes. That's the nature of the beast. So we feel pretty good about the growth, the profitability, and we're excited about the momentum on Sapphire Reserve and Sapphire Reserve for Business also. Super exciting.
Okay. So maybe you can just help us think through the economics of the Card business and whether they've changed or not. It doesn't seem from what you've said they have changed, but obviously there've been a very significant increase in benefits relative to the subscription fees. And I'm also just curious, I mean, when you think about the cost outlook, has this actually impacted, you know, the cost outlook as you think about next year? Is that part of the increase in expenses? And then just one other one to kind of weave in is merchant litigation settlement, so MDL 1720. How much of an impact does that have?
Okay. Remind me if I forget to get there. You know, what a thing to forget, so just when we do, when we look at each individual card, or each individual portfolio within the Card business, we design it to be standalone, profitable, right? And you know, as those Cards and that value proposition ages and we look to refresh it, we always look to bring incremental unique value to our customers. And in doing that, obviously part of the compensation for that in order to remain profitable is higher annual fees. I'll come back to that in a second, but also the fact that, you know, merchants are excited about getting access to our customer base.
And so we're actually able to offer strong merchant partnerships that are co-funded, like Apple and StubHub, or, you know, some of our proprietary assets that we've invested in, like Chase Travel or our luxury hotel collection, The Edit. Some of the economics of that is able to be reinvested back into the customer experience. And then through refreshing, we're expecting to see outsized growth, right? So more acquisitions, more spend, more engagement. So all of that leads us to over the lifetime of an individual card customer and/or the portfolio to continue to believe that it's strongly profitable. When you refresh, you experience expenses quicker than you see the fees roll in. It usually takes a year for that to, you know, manifest as everyone's going through the refresh cycle.
We've been growing our annual fees in the Card business in double digits consistently over the last many years, and we expect that to continue. Yes, you're going to see product benefits go up in tandem, but those two things are going up in tandem. It changes the geography a little, of course, because that goes up through marketing expense, but we feel really great about the profitability of the business, and, you know, and as I said, we're excited to continue to refresh products next year. That's what it takes to continue to be, you know, to have a diverse set of products that resonate with all customers and, you know, drive high engagement, and all of that is in our outlook.
And then the merchant litigation settlement.
Yeah. Trying to forget.
MDL 1720, I think, is the.
Got it. So a couple of things about that is that the settlement that's been proposed is not yet final, as you know. It has to work through the courts. That's going to take some time, you know, while we don't have, and I'll talk to you about, you know, my thoughts. This isn't the first proposal that was on the table, so we had some understanding of the general contours and the fact that there was going to be, you know, material rate concession in terms of interchange, so while it's not necessarily a 2026 budget issue, know that we knew that in all of our long-term planning a year ago, and so, you know, because the initial proposal had, you know, had rate discounts in it, so we've been kind of planning with this i n mind.
The concessions that the networks have made to reach the settlement are significant. That's what it took. You know, honor all cards is not a religious thing anymore. The ability to not honor all cards is extremely significant. The ability to surcharge cards is significant, so that's what it took to reach the settlement. You know, we will adapt and adjust to that, and, you know, it remains unclear to me at this point how merchants will individually react to those flexibilities and freedoms. We'll have to watch that over time. I continue to genuinely believe that accepting our cards is actually a strong net positive for merchants and that they really understand that and that we would advocate for our cards to be freely accepted for our customers, but we will see how that plays out. I'm confident in the hand we have.
We have a diverse set of products. We serve, you know, a diverse set of customers. And I'm confident that with our scale and our, you know, capabilities, we'll be able to adapt. But that's the price of getting this done. I want to get it done.
Okay. So let's talk about the competitive environment. And I think it's quite clear that one of the themes emerging from this conference is that a number of your peers are really leaning back into growth. And one of the areas that they are looking to grow more aggressively in is the consumer business. So two questions. I mean, the first is, have you seen any significant change in the competitive landscape when you think about, you know, your consumer businesses? And then maybe you can also just touch on regional bank consolidation, which is obviously another very important theme this year, and whether or not you think that is going to increase or decrease the opportunity for the consumer business and JPMorgan over the next couple of years.
So I would start by saying that, like, we've been a strong growth franchise for a really long time. As you know, our philosophy has been, regardless of anything else, to make sure that we are consistently investing in strategic growth across the complex for the benefit of our customers and you all. And so, you know, we kind of know what we're here to do. And as much as I would say, yes, we have seen, you know, pockets of resurgence, of more activity, you know, imitation is the highest form of flattery. We'll take it. You know, as much as we've seen that, it's been competitive. Like, we compete with everyone. We compete with traditional banks. We compete in local Markets with local and regional banks. We compete with fintechs. So, you know, it's not that there's been an absence of competition.
And competition is generally a healthy thing, right? It sort of makes everyone better. And we, you know, never expected the competition to stand still. So yes, have I seen that some of our traditional competitors are leaning back into growth, both, you know, proactively and because they can? Yes, of course. You know, I never underestimated them. I don't think anyone should. But, you know, we are very clear on our strategy. We are very consistent in our capacity to invest. And I think we out-execute. And I think that's pretty clear. So I don't discount the competition, but competition is healthy. And that's everywhere, by the way. It's not just the banks, the small banks, the big banks, local, national, but also, you know, in many of our businesses, we're competing with fintechs and growth techs and, you know, and a bunch of others.
So, you know, bring it on. What I would say on, you know, consolidation of banks is that, you know, the U.S. banking system is healthier because we have banks of all sizes, and I think that the environment is more constructive to M&A today than it has been. And that's, you know, adding a level of capability and excitement that I think will be very healthy, and yes, obviously, I think scale matters. You know, I think scale matters, and so, you know, as more and more companies are either able to complete their capabilities, complete their product set, or gain more scale and more capacity to invest, it will breed, you know, higher levels of competition, and I think that's great. I think it's great for customers.
So, you know, it's been great to be a growth franchise in a world where maybe some others were in a retreating mode. Being a growth franchise in a highly competitive market is not new to us, and we're all in.
So again, not to put too fine a point on it, but nothing changes what you talked about in May in terms of 15% market share in deposits, 20% in Card, and doubling the market share in connected commerce and Wealth Management.
Or die trying. No, no. So I, you know, obviously these are long-term objectives. And so, you know, of course we didn't build those objectives in a vacuum expecting that there would be no countervailing competitive forces. And so, you know, I expect there to be competition, disruption, changes in laws and regulations, much of which we couldn't predict today. That's what the last 10 years have looked like too, by the way. And we've done, you know, pretty well. So, you know, we know what it's going to take to do this. It's a long game. It doesn't have to be linear. I will, you know, I will point out that large banks, ourselves included, did outperform in deposit gathering during the pandemic. And you're going to see a little bit of share normalization for a couple of years while we all return back to normal trends.
All of that we expect. So it's not going to be linear. It is going to be consistent, and it's going to be measured over years. And it's not just new branches, and it's not just new Markets. It's also out-executing in our existing Markets because of the brand, because of the real estate, because of the people, the products, the tech, you know, and the capabilities and service. And so, you know, I'm expecting there to be a lot of bobbing and weaving and zigging and zagging and hustling to do it. But yes, we're going to do it. Card momentum is great. You know, we're gaining share again year over year in both sales and outstandings. You know, it's a combination of, as we talked about, refreshes, but marketing and risk. And we're number one in Card. We're not number one in all Card segments.
We're not number one in starters. We're not number one in affluent. And we're not number one in business. That's my opportunity. And we're going to have outsized growth there. So we're pretty excited about that. And we're definitely seeing that momentum. You know, commerce is a tale of two cities. Travel's doing very, very well. Media is a little slower. So, you know, we're refocusing on that, but travel's outperforming right now. And, you know, we doubled the Wealth Management business over the last five years. You know, yes, it's competitive, but we're seeing double-digit client investment asset growth year- over- year, record first-time investors, strong flows. You know, our SDI account growth is strong on a platform we're really proud of now, by the way. We're achieving a 70 NPS in that business, which is pretty good. And we're hiring and training advisors.
Setting up the landscape for continued growth, and I'm pretty confident.
Okay, so let's talk about efficiency and productivity, and look, I think you gave some pretty staggering numbers back in May when you talked about the potential of increasing, you know, account service per head count by 25%. You talked about productivity improving by 40%, and again, these are all longer-term numbers, but maybe you can just unpack some of the drivers to that significant improvement in productivity, but just overlay that with some of the use cases from AI, you know, that you've seen this year and how you expect that to track over the next couple of years?
Okay. Yes, absolutely. And if I don't fully answer it, like, remind me. So AI is everywhere, of course, and everybody is benefiting. And so we think about sort of AI as an enabler to our business, both in terms of, like, big AI projects that are going to address large groups of people in terms of efficiency and productivity, and then small AI where we're putting tools in the hands of managers of, you know, a few hundred people, but asking them to have the same, you know, level of, you know, productivity. So we're sort of thinking about it very broadly, but we used Operations as, like, the tip of the spear and the showcase of what you could expect AI to help deliver. And it's not all and only AI.
And we sort of talked about the fact that we had delivered, you know, significant efficiency looking back five years, but looking forward five years, and we're now one year in. So it's not so long-term, really. We expected to increase the productivity of our ops specialists by more than 40%. So let's say 40%-50% growth. So we're a growth business. We're going to grow through a lot of that. So the net headcount reduction will be lower, but each individual operator will be, call it, 50% more productive. And that, and we're seeing that. So we've seen the step change required to deliver that this year. So whereas we were improving that productivity, I'd call it an average 3-ish% a year, previously largely not AI-enabled, we've now doubled that to 6% and expect that to be maybe not a hockey stick, but to improve.
We're like well on our way. It is very real. It is working. It is happening, and it's a combination of work elimination through self-service, you know, investments like digital assistance and personalization. It's process automation around things like document management or AI voice. It's things, it's AI assistance for employees, whether it's Operations employees or in the branch or even, you know, me, and it's customer experience investments across the board, and that's just Operations. Obviously, you all know coding assistance and software development is another key area, and then, as I said, we're asking everyone everywhere to, you know, invest in making sure that we're deploying AI, and we've not yet really scratched the surface on what an agentic system will look like. So, you know, we're talking, yes, about using large language models and generative AI increasingly to deliver that.
Coming next is going to be, you know, agentic, you know, in more complex, more data-intensive, you know, decision-making protocols on us and off us, like, you know, fraud investigations, complex account openings. So there's just a lot, but it's real. It's happening. We've seen the step change that's required to be able to be confident we're going to do it.
Okay. So we've got a few minutes left. So let me ask you, two other quick questions. I mean, the first is, look, there's a lot of moving pieces on regulatory capital. You know, obviously we're still waiting for the Basel III Endgame proposal, G-SIB potentially getting recalibrated, CCAR getting overhauled. But it does feel as if the industry is going to have a lot more excess capital than they've had in the past. Can you talk about the opportunities to redeploy that excess capital within the consumer business? Because obviously you have actually consumed a lot of the capital generation, over time. You've been one of the bigger consumers. What is the opportunity from here to redeploy that capital organically in the business?
So, obviously, as you articulated, we're sort of hopeful that we're going to see good prudential regulatory reform in all the forms you talked about. The devil will be in the detail. And that will be very constructive for you know long-term strategic growth in the industry. But as you obviously also know, we already have excess capital within the company and have you know a lot of it and have done for quite some time. What has not been as true is excess liquidity. Liquidity has been much more binding for us. It has been much more binding for me. And so you know on top of all the things you talked about, momentum on you know liquidity rules reform and coherence with stress testing is critical to the ability to be able to continue to think about deploying excess resources writ large.
And so, you know, for us, therefore, we've always had, you know, as much capital as we can, you know, deploy at good returns. Discipline is always the name of the game, particularly in consumer lending. And so, the shorter-term impact, sensible reform is required. It will mean that our excess position will go up. The shorter-term impact will be on pricing. So, you know, we are very, very disciplined on making sure that we price for risk-adjusted returns and not for growth or market share. We will continue to do that even if we see others price in a more irrational fashion. Those types of moments of irrationality come in and out, but they don't usually last that long. And so we're just going to continue to be very, very disciplined. But the more we get, you know, lower capital requirements, the more we can reflect that in pricing.
And with some liquidity relief, we should be able to see some loan growth, which I think would just be great for consumers. The poster child for this is auto, where it's 100% risk-weighted and the economic risk is, you know, one-fifth of that. And so, you know, we really would like to see that for our customers.
Yeah. And then, briefly, inorganic opportunities.
Yeah.
You know, obviously you can't buy a bank, but there's lots of other things that you could buy. There's bolt-on acquisitions, especially in the consumer business.
Yes.
How are you thinking about that and how's the pipeline for that?
So, you know, the hierarchy of capital deployment always, you know, prioritizes organic growth. And so that's like the number one, two, and three focus for us, of course. And I think, you know, while we're always surveying the landscape, you know, of deals that could be done, deals that we would want to do, deals that have been done, you know, did we see them? Did we look at them? Did we like them? So we're constantly doing that. It keeps you up to date. It keeps you smart. It keeps you, you know, really thinking through the art of the possible. You know, I would suggest to you that we have less need in our core businesses, our sort of at-scale businesses. Not that we aren't open to it, but it's less likely that we wouldn't be doing anything but focusing on organic growth there.
But we have our commerce business. We have Wealth management. And, you know, obviously you've heard the industry talk about the fact that, you know, we're going to get capable in DeFi and AI and DeFi and, you know, and other AI capabilities. So there's possibly some things, and we're always looking, but good, old-fashioned organic growth, the investments that we're making that I talked to you about earlier that we know are going to work, that will pay, that's our key focus.
Okay. I think with that, we're out of time, but Marianne, great having you here.
Thank you so very much.
See you next year.
Of course.