New York morning trade.
We are seeing shares of Nvidia rise along with shares of some key software names video veiling its new PC super chip and announcing it will work with Dell Microsoft and Lenovo to build laptops to run AI agents.
Now Wall Street may be treating AI primarily as an efficiency play, but could the market be missing the true financial opportunity while in the era gentic finances and a structural multiplier.
On the overall transaction volume of the financial system, while by marrying AI agents was always on blockchains financial activity can continuously run 24/7 365.
So joining us to explain the agentic economy thesis is Devin Ryan, Head of Financial Technology Research at Citizens.
Devin, great to have you here.
Thank you so much for joining me.
Great to see you thanks for having me.
Well, we are almost at the halfway mark of 2026 and so far this year we've seen a lot of advances when it comes.
To artificial intelligence and whether we're talking about the technology or AI as an investment theme, there's a lot of ground to cover.
So tell us about the main takeaways from your gente economy report.
Sure, so I think what we're seeing right now is the AI is moving from primarily how can we drive efficiencies and business models, how can we leverage it within service functions to How can we actually drive more revenues with this technology, and I think we're moving to the next phase which we're saying is the agentic finance economy and that is really agentic trading for brokerages, agentic payments, and there's much more and so we're kind of at the first stage of the agentic economy and we're seeing just over the last couple of months really interesting offerings from some of the brokerage firms like.
Robinhood just over the past couple of weeks here in public and eToro and our view is that this is going to become a massive story over the next 18 months.
So when we look at volumes for trading, just one example, you know, on Robinhood, the average customer trades 3 times a month, and that's actually skewed higher by the most active traders.
So most customers are trading 0 to 1 times a month.
The work we're doing suggests that The agentic trading when agents are trading on behalf of customers, they're going to trade 10 to 20 times more on average.
So you think about that volume multiplier and that's not churning the account.
It's just basic strategies like tax loss harvesting and rebalancing.
And then when you put options overlays on portfolios, there's just going to be a tremendous multiplier and really none of that is in models right now.
So we're excited about some of these stocks that are going to benefit from that.
And of course when we're talking about the agentic economy, I do have to ask you about this technology convergence and the timeline compressing.
So what are we looking at?
Well, I think what's happening right now is you're seeing the first steps of firms that are opening the door to allow agents and primarily agents are people can bring their own agent to Robinhood or to eToro, for example.
We haven't moved to the next phase where you know companies are going to start to, in my opinion, in natural language, allow their customers to tell them, here's my life circumstances, here are my goals, here's my risk tolerance, here's the products that I want in my portfolio.
Or to optimize my entire financial life and now go execute and that's what's coming next and that's going to be really what's going to drive that massive multiplier but I think Robinhood made their launch on Agenta coming to the firm a week ago.
Within the next 2 to 3 quarters, we expect them to roll something out that's going to be embedded for all of their customers.
So even novice investors are going to have access to agents within the firm, and that's really, you know, we're not years away from that.
We're literally.
Quarters away and that's what's going to be the multiplier now.
The key question is performance.
The end customers need to have good performance.
They need to be protected, and I think all that is coming together right now.
But the performance, in our opinion, is going to be better because you have a lot of people that don't have the experience or the time to just run some of these basic investment principles around tax loss harvesting or rebalancing, and that's really where the agents can add tremendous value for customers.
Yes, and while we're on this topic.
Layperson out there who is watching and they're not completely tuned into what's unfolding here.
We're talking about financial services, which is a highly regulated industry.
So what do you think needs to happen since you mentioned the protection part of it?
Well, I think that a lot of the rules are actually already coming into place.
But for example, if you're a firm and the agent goes rogue, who's responsible, right?
Is that the firm's responsibility?
Of course it will be.
I think there's best interest standards.
You have to make sure that the existing financial regulations are applied to the agents that are going to be operating on behalf of the customers and that the firms are going to take responsibility and be liable for that.
So I think the firms, the brokerage firms, the banks, etc. want to make sure that they have the controls in place to be able to monitor agents that you don't have hallucinations, you don't have some of the bad things that could happen.
But we do, the regulators are progressing.
A system where they want to allow in our view the technology but with the same investor protections that exist in the regular financial system and those need to be applied to this as well to this new technology to allow it to thrive and ultimately to the.
Point hopefully add value for the end customers.
It's not just about multiplying transaction activity.
It's about where can you drive optimization of an individual's financial life and ultimately lower the bar for who has access to financial products and great financial advice.
And while we're on this topic, I do want to get your take on the TAM45, the total addressable market here.
So in a nutshell, can you explain this to us?
Well, the TA for DeFI is in our view, essentially all financial services.
You know, our view is that really DeFI and blockchain rails is what we're talking about here are just an upgrade to the financial plumbing and that many activities are going to come onto the blockchain rails over the next couple of years, including payments, including.
Trading 24/7 365 instant settlement and so the TAM is really looking at all financial transactions in driving activity in the blockchain.
You're going to drive down costs and you're going to remove certain intermediaries.
That's why there's such competition right now amongst all the different financial players because they want to maintain their role in the system, whether you're a payment firm or payment service provider or.
Where do you sit in the trading flow as a custodian or as an underwriter and so I think everybody is is in the financial system looking at how do we add value today and I think that that's ultimately where the competition is going to be, but we do think that many levels of financial services are coming on blockchain rails over the next couple of years.
So I would say that the TA is, uh, it's, it's hundreds of trillions of dollars.
Put it that way, yes, and of course I have to ask you, since you and I are both human beings, what about the human premium here and the actual advisor?
What does it mean for their value?
Yes, so it's a great question.
It's it's a debate point with a lot of our institutional clients who are trying to figure out in a world of agents can do everything, the level of advice is going to improve.
Why do you need people or personalized advice and.
Our view is that we're going to live in a parallel world where you have agents that are doing a lot for individuals and those individuals can do that on their own in some cases, but a lot of cases they don't want to.
They want to trust somebody.
They build a relationship over decades.
With somebody and advisors can add a lot of value both around the advice they provide, but also the access they give around products right if you want access to certain alternative assets or SpaceX IPO right now agents don't have access to that and so.
I think advisors that adopt AI are going to become much more productive and are going to be able to cover many more accounts and do a lot more for the clients, and that's going to be the bar rising.
But we do see kind of a parallel world where agents are going to do a lot of financial transactions and human beings will still be very valuable.
People want to pay for a concierge.
They want to pay for the personalized touch, and I think that's one of the reasons why they have advisors today and that's going to be a reason why they'll have advisors in 10 years as well.
Yes, and while we're talking about this topic, I do want to get your take on risks out there when it comes to agentic AI within FinTech.
So where do your concerns lie right now?
Well, I think you look at all technologies and then you look at regulatory response and you go back over 100 years, you know, a lot of times regulators respond to something going horrifically wrong, right?
And so I think my concern is that the technology is getting embedded quickly and that Not all the we talked about the, you know, making sure that best interests are fiduciary standards as advisors and all the other regulatory protections for the end customer are in place and so you know this new technology in theory adopting it quickly could lead to bad outcomes, you know, rogue agents, you know, hallucinations, all those types of things where you ultimately get a couple bad.
Outcomes that drive a very significant regulatory response and then that slows the progression that I think we're on the path right now.
So that's something we're watching closely to make sure that things don't go wrong and I think that's part of why companies, even though the technology is there today to embed firms like Robinhood and other brokerages are moving slowly because they want to make sure that they're embedding it in the right speed and monitoring as they scale it within the firm.
And one area I do want to get your take on is what's happening in the crypto markets.
So in New York morning trade, we are looking at red for Bitcoin as well as ETH, but given the record run in the equity markets, we are seeing this divergence.
So what do you make of the season we're in when we're talking about the crypto market?
Yeah, you know, I think there's always a lot of focus on short term trading, and that's just the way the markets are, right?
And we've been in good markets, bad markets over the past year.
Our view is when you zoom out and you think about the regulatory progress, whether it's clarity.
Act is, I think a big debate point right now, and we had very positive progress on that getting out of the Senate Banking Committee getting passed a couple of weeks ago.
Now I think people are waiting for whether it's going to get onto the Senate floor, and that's another kind of timing dynamic that we're waiting for.
That's going to be, I think, a key element here to drive the next step of adoption of blockchain in business models and financial services.
So people, I think prices are definitely connected to that recently.
There's a little bit of the macro overlay as well that's I'd say been more negative, but when we zoom out, we still feel you just follow the adoption curve and follow the.
Progress of how much traditional financial firms are investing in this technology, how much they're the M&A in the space where they're clearly moving in a positive direction, and that to us is what's going to be the bigger story of the next 2 years, and that will likely drive price as well.
So short term trading, we're not that focused on, but we still think it's a very positive trajectory.
And finally, Devin, before I let you go, I do want to get your take on prediction, Mark.
Since we're talking about DI as well as the intersection of regulations, so given a lot of the opinions out there, especially from the agencies, what is your take on where this space will go and where prediction markets will be, say, a year from now?
Yes, well, we just finished May.
May was another record month, so we've been on an incredible trajectory for the space, and I think that shows the kind of the.
The demand function for this new product type or asset class, if you will, we're still in the very early days.
So even with record volumes around $30 billion in the past month, that's tiny compared to other asset classes.
US equities trade $10 trillion to $20 trillion a month, so.
We think that there's been substantial progress.
I think the US regulator CFTC have made it very clear this is their domain, and they're going to fight states that push back on this.
And ultimately when we look at over the next 1 to 2 years, we see the demand really broadening to other parts of the market, primarily sports today, but we're seeing a lot of.
Signs that financial institutions want to bring this under their tent as well and use this as a product for their clients and their clients ultimately want to use as a product to both engage in but also to hedge existing exposure but also as a signal to.
Their existing portfolios.
If you have a stock that is going to beat earnings and the prediction markets are saying it's very likely, you may want to do other things across your broader portfolio that you're managing.
And so I think there's a lot of valuable signal to these markets.
So we're seeing a record month, but still very, very early days here.
Well, Devin, we were able to cover a lot of ground, so I appreciate your time.
Thank you so much for joining me here at the New York Stock Exchange and thank you so much for sharing your insights and your perspective.
Thank you so much to see you.
