SAN FRANCISCO—Wells Fargo & Co. is betting big on artificial intelligence, tapping a seasoned banking executive to spearhead its AI ambitions while reshaping leadership in its core consumer operations. The move, announced Thursday, positions Saul van Beurden, 48, as the bank’s first dedicated AI leader, a role carved out from his current post as CEO of consumer and small business banking. In a parallel shift, Kleber Santos, head of consumer lending, steps up as co-CEO of the combined consumer banking and lending unit alongside Mr. van Beurden.

The dual appointment underscores Wells Fargo’s urgency to harness generative and agentic AI amid intensifying competition from tech-savvy rivals like JPMorgan Chase & Co. and fintech disruptors. ‘Generative and agentic AI will reshape competitive dynamics across every industry, and we are embracing these tools as we have embraced other innovations in the past,’ Wells Fargo CEO Charles Scharf said in the official announcement on the bank’s newsroom site. Mr. van Beurden and Mr. Santos have collaborated closely to streamline consumer experiences, making the co-CEO structure a formalization of their existing partnership, the bank said.

This isn’t just a title shuffle. It frees Mr. van Beurden to dedicate significant time to AI strategy across Wells Fargo’s sprawling operations, which serve 115 million customer accounts and manage $1.9 trillion in assets. The consumer banking and lending division, a profit engine generating billions in net interest income, will now operate under unified leadership to enhance seamlessness for retail clients.

Wells Fargo’s AI Awakening

Wells Fargo has been quietly building AI capabilities for years, but recent boardroom emphasis on generative AI—tools like large language models that can create content or act autonomously—has accelerated the push. Mr. van Beurden, a 20-year Wells Fargo veteran who rose through Dutch banking giant ING Groep NV before joining in 2014, brings operational grit rather than pure tech pedigree. His track record includes scaling digital banking during the pandemic, where Wells Fargo’s mobile app downloads surged 50% year-over-year in 2021, per company filings.

The bank’s AI focus aligns with industry trends. JPMorgan has deployed AI across trading and risk management, while Bank of America Corp. uses it for fraud detection. At Wells Fargo, early wins include AI-powered chatbots and predictive analytics for loan approvals. ‘Saul’s deep understanding of our customers and businesses, combined with his passion for technology, makes him the ideal leader to drive AI across Wells Fargo,’ Mr. Scharf added in the news release.

Industry observers see this as a signal of maturity. CIO Dive reported the reshuffle allows Mr. van Beurden to oversee AI transformation across business segments, quoting sources close to the matter. Wells Fargo’s 2024 annual report highlighted $1.2 billion in tech spending, with AI as a priority to cut costs and boost personalization.

Van Beurden’s Dual Mandate

Mr. van Beurden’s plate is full. As co-CEO, he’ll co-steer consumer banking—home to 4,300 branches and digital platforms serving 30 million households—with Mr. Santos. The pairing leverages Mr. Santos’s lending expertise; he oversees $400 billion in mortgages, auto loans, and credit cards. ‘Kleber and Saul have been working closely for some time to deliver a seamless experience for consumers,’ the bank noted, emphasizing natural evolution over disruption.

Behind the scenes, Wells Fargo faces regulatory scrutiny from its 2016 fake-accounts scandal, which cost $3 billion in fines. AI could aid compliance, with agentic systems automating audits. On Wells Fargo’s governance page, leadership bios underscore a tech-forward board, including ex-Google executive Diane M. Sullivan.

Current sentiment on X reflects optimism. Posts from industry accounts praise the move as ‘forward-thinking,’ though some users question if a banker can truly lead AI innovation amid Big Tech dominance.

Santos Steps Into Expanded Role

Kleber Santos, a Brazilian native with stints at Citigroup Inc. and Barclays Plc, joined Wells Fargo in 2020. His elevation addresses consumer lending’s growth, where originations hit $150 billion last year. Combining banking and lending units aims to reduce silos, mirroring structures at U.S. Bancorp. ‘This partnership will allow Saul to spend a meaningful portion of his time driving AI across the company,’ per the Wells Fargo newsroom.

American Banker detailed how the co-CEO model frees Mr. van Beurden for AI, noting Wells Fargo’s consumer chief was already moonlighting on tech initiatives. Shares of Wells Fargo rose 1.2% Friday, outperforming the KBW Bank Index.

The strategy taps into AI’s potential for hyper-personalization. Wells Fargo’s Erica virtual assistant, launched in 2018, has fielded 2 billion interactions; agentic AI could evolve it into proactive advisors.

Industry Ripples and Risks

Bigger picture: Banks are in an AI arms race. Goldman Sachs Group Inc. predicts AI could add $1 trillion to banking profits by 2030. Wells Fargo, still under Fed asset caps from past misdeeds, sees AI as a path to efficiency. Mr. van Beurden’s leadership could integrate AI into wealth management, where robo-advisors manage $500 billion.

Risks loom. AI ethics, data privacy under CCPA, and hallucination errors in models pose challenges. Yahoo Finance, citing CIO Dive, flagged the bank’s intent to scale AI responsibly. Wells Fargo’s 2025 tech roadmap, per earnings calls, targets 20% cost savings via automation.

Competitors watch closely. Posts on X from fintech influencers highlight Wells Fargo’s move as ‘catching up,’ but praise the executive’s banking-tech blend. Leadership bios on wellsfargo.com reveal a board with AI expertise, including Tim Sloan, ex-CEO pushing digital shifts.

Strategic Bets on Agentic Future

Agentic AI—systems that act independently—promises revolution. Wells Fargo envisions it for loan underwriting, cutting approval times from days to minutes. Mr. van Beurden’s team will likely partner with Microsoft Corp. and Google, following $500 million cloud migrations.

The consumer co-CEO duo ensures continuity. Mr. Santos’s lending focus complements Mr. van Beurden’s broader vision, per GuruFocus. This structure, rare in banking, echoes co-CEO experiments at Netflix Inc.

For industry insiders, this signals Wells Fargo’s pivot from scandal-plagued past to AI contender status, with Mr. van Beurden as the linchpin.