Major U.S. banks are aggressively expanding artificial intelligence (AI) hiring as they increasingly look to technology for efficiency gains and revenue growth, according to executives and data reviewed by industry analysts. AI has so far delivered clear returns on investment (ROI) for a sector squeezed by rising costs, competition from fintechs, and shifting consumer expectations.

Citi, Truist, and Wells Fargo are among the large financial institutions scaling up their AI investment and recruitment initiatives, joining early movers like JPMorgan Chase and Bank of America. Truist, for instance, has quadrupled its AI-focused workforce over the past four years and plans to grow it by another 50% in 2024, according to Chief Information Officer Ken Meyer. Citi has doubled the number of AI staff over the past year.

“AI-driven solutions are no longer pilot programs. They are a core part of our business strategy,” said Meyer, adding that these investments have reduced operational costs by streamlining processes such as call center interactions and loan underwriting. Truist’s AI-powered digital has handled more than 30 million interactions since its launch, while similar tools at other banks have achieved double-digit efficiency gains in processing and customer service.

JPMorgan, which boasts more than 2,000 AI and data management experts, reported a 20% decline in yearly fraud losses after deploying AI tools, according to people familiar with the matter. The bank recently posted hundreds of AI-specific job openings, particularly for roles in machine learning, data science, and responsible AI development.

This surge in hiring is occurring even as many banks freeze or reduce staffing in other areas. Competing fintech firms and technology giants are fueling a war for AI talent, pushing banks to offer higher salaries and more flexible work arrangements, say recruiters. “We’re seeing a huge increase in demand for data scientists and AI engineers in the banking sector—by some estimates, job postings are up 50% from last year,” said Cris Glavich, managing director at recruiting firm Glocomms.

The drive to integrate AI comes as banks contend with margin pressure from higher funding costs and stalling loan demand. Artificial intelligence has emerged as a potential release valve, helping reduce manual workloads, improve risk management, and unlock cross-selling opportunities. According to a November survey from Arizent, nearly 70% of banking executives reported early or significant efficiency improvements from AI adoption.

Still, the rollout is not without obstacles. Regulatory scrutiny is intensifying, especially around the use of AI in credit decisioning and customer interactions. Lenders must tread carefully to avoid introducing bias and ensure fairness in their algorithms, industry analysts note.

“Banks are now prioritizing responsible AI development,” said Jason Boud, CEO of RegTech Associates. Institutions are hiring ethicists and explainability experts, tasked with making sure AI tools comply with new and evolving standards from the Office of the Comptroller of the Currency (OCC) and other watchdogs.

As the technology continues to mature, bank executives expect competition for AI talent to intensify further. “The winners in banking’s next chapter will be those who move quickly, scale ambitious projects, and pair innovation with strong compliance,” Meyer said. For now, though, the sector’s AI arms race appears only to be accelerating.