Peter Crawford: Yes, so we saw, you know, I think if you look at the end of the year with our — we target in the banks kind of a 5% to 6% overnight liquidity at the banks. That position roughly doubled at the end of the year. We always like to build up extra liquidity. If you look at our prior years, we did the same thing to make sure we have a lot of excess liquidity heading into what is, again, typically the seasonal investment season. So we expect to draw down those liquidity levels. And that will help to support the seasonal activity that we’re seeing. If you look at prior years, over the course of the last several years, you can kind of gauge a sense for that seasonal activity. And I would say this month is progressing kind of consistent with that.
So without getting to sort of specific numbers in terms of what we’re seeing month to day, I would say it’s consistent with what we’ve seen in previous years and consistent with our expectations. But again, it’s not only really clear that the seasonal activity that we see in January through March and then the tax season in April, this isn’t client cash realignment. This is just activity that we see every single year as clients build up their cash balances at the end of the year and then deploy those into the markets in the first part of the year and then deploy those to the IRS, I guess, in April.
Operator: Thank you. Next, we’ll go to Alex Blostein from Goldman Sachs. Please go ahead.
Alex Blostein: Hey, good morning everybody. Thanks for the question. Just another quick follow-up on the funding dynamic. So I appreciate it might be difficult to predict client behavior with respect to transactional sweep cash on new assets, but maybe give us some color on the trends you’ve seen in transactional cash as a percentage of that new client assets. Call it over the last maybe six months or so just to help us kind of with the starting point, because obviously that’s a really important dynamic when it comes to rebuilding the cash balances and deposits?
Walt Bettinger: Yes, so that, I mean that’s why we call that out as I would say an area of uncertainty going forward is because we are seeing, not surprisingly, we’re seeing clients who are coming in are realigning their cash as existing clients are. And so that’s happening, there’s a certain amount of float, if you will, that we typically rely on. That is contributed a little bit less over the previous six months as clients are realigning their cash more quickly maybe than traditionally they would have done. And as rates come down, one would expect that that activity would be a little bit less immediate or timely or to the same extent. And so I think that is one of the uncertainties. What happens with the level of new cash that comes in as the Fed cuts rates 3 times, 4 times, 6 times, whatever it might be.
That’s why we call that out as an area of uncertainty. But we certainly still expect, as we’ve seen throughout history, that over time, as we add accounts, as we add assets, again over a longer arc of history, that those transactional cash balances grow with the growth in accounts and the growth in assets. It’s just over a short period of time, like a quarter over a year, it’s a little bit harder to gauge exactly what the near-term contribution will be. But again, over time, over three years, five years, et cetera, we expect that our total transactional cash balances will grow as we grow our client base.
Operator: Thank you. And our final…
Jeff Edwards: Thanks, operator. I think we have time for one last question.
Operator: Absolutely. Our last question comes from Devin Ryan from JMP Securities. Please go ahead.
Devin Ryan: Thanks so much. Good morning. It gets to a different topic than some of the other questions, but probably for Rick, since you mentioned in your remarks, so obviously the firm has a strong technology background, so I’d love to just talk a little bit more detail about the opportunity you guys see from artificial intelligence investment as we look beyond 2024. So maybe looking out the next three to five years, what are some of the areas you’re most focused on? How much efficiency do you think could be derived from the current use cases you see? How much productivity uplift? And just more generally, how material AI will be for Schwab? Because it would seem like this fits right into the ethos of the company long-term, but I know sometimes things take a while to kind of implement. So just love to hear a little bit more about this strategy there? Thanks.
Rick Wurster: Devin, thanks for the question on AI. I think it will have a meaningful impact in three areas on our employees, on our efficiency, and on our clients. Let me start with employees, I think AI can be used to make our employees even more effective with our clients, to provide them with the ability to have an answer that is really strong and in particular for our newer employees that are coming up to speed, the ability for AI to make them as efficient or as effective as a more experienced employee. I think will be powerful both for the employee and for our clients that are receiving the thought from that person. So I think there’s a lot of benefits in helping make our employees more effective with clients. There’s clearly an efficiency opportunity in AI, and here with 1,000s of phone reps that we hire each year, at some point, we likely will have the opportunity to hire less in a particular year, because we’ve made our reps both on the phone, on chat, in our branches even more effective and efficient, because we’re powering them with information and putting it at their fingertips.
