US regional bank executives said AI is reshaping how they manage expenses, detect fraud and generate revenue.
The executives outlined their uses of the technology in conference presentations held June 9–10, though several also cautioned that the technology carries its own costs.
First Horizon Corp. CFO Hope Dmuchowski said AI is most immediately affecting the bank's fraud operations, in which tools are being used to identify scam patterns, including compromised client emails.
First Horizon spent three years and $100 million on technology, fraud and cybersecurity investments, and is now seeing revenue contributions from those efforts, she said. The goal is for AI to be net neutral to costs, with revenue benefits coming from faster underwriting cycles and more targeted marketing lead generation, Dmuchowski added.
"Early on, there was a lot of expectation that AI was going to take all these costs out of the system, and it was just going to fall on the bottom line," Dmuchowski said. "There is a cost to running AI."
Flagstar Bank NA has deployed an internal AI tool, Star IQ, with 89% utilization among employees, Chairman and CEO Joseph Otting said.
"We want to continue to expand how people are using it," Otting said. "We've kind of had people go from Google to an AI tool. But really, we want people to use it for contract reviews ... financial analysis, all those things are available for people to use that. And it's going to make us a much more efficient organization."
Flagstar has removed more than $700 million of annualized costs over the past 18 months, with head count declining to roughly 5,300 from about 9,200, CFO Lee Smith said. The company is continuing to invest in AI applications across financial statement spreading, credit memo underwriting and quality control, Chief Banking Officer, co-President and co-COO Ricahrd Rafetto added.
Pinnacle Financial Partners Inc. has employed 16 internal AI engineers focused on banker enablement, conversion support and efficiency, and 1,800 individuals are using licensed AI tools, President and CEO Kevin Blair said.
"We have many use cases that we've already deployed, things like [anti-money laundering], [Bank Secrecy Act compliance], things like appraisal review, and it's going to make us more efficient," Blair said.
"If people are concerned that [agentic AI] is going to disintermediate Pinnacle, it's actually going to make us stronger because I can tell you that clients value relationships, not just the price on the deposit," Blair added. "If you're in the transaction business, I'd be worried. But if you're in the relationship business, this is going to give us a competitive advantage."
East West Bancorp Inc. intends to be a "quick adopter" rather than a pioneer in AI, citing applications in loan underwriting, customer due diligence and analytical assessment, Chairman, President and CEO Dominic Ng said.
"Whatever [the large artificial intelligence companies] do, there will be something that's very applicable for the bank, make sure that ... some pioneer banks who love to be the first one to get there, let them test it out, right?" Ng said. "After they test it out, get burned with a cyberattack, or whatever that is, when that's done, I'm coming in, right, coming in fast."
Atlantic Union Bankshares Corp. is approaching AI primarily through bolt-on modules from existing fintech vendors rather than wholesale system replacements, with initial focus on back-office operations, fraud mitigation and BSA/AML compliance, President and CEO John Asbury said. All personnel have access to tools, including Microsoft Copilot, he added.
Asbury said the company is weighing AI deployments through a cost-benefit lens, citing concerns about token usage costs and the need for measurable hard-cost reductions or revenue gains, including shorter financing cycle times.
"We need to make sure that we're not simply running up our expense base," Asbury said.
Zions Bancorp. NA President and COO Scott McLean said the bank's API-enabled core system has greatly enhanced its ability to integrate AI to simplify loan and deposit operations, with fraud detection being one of the biggest benefits.
"We have a continuous flow of activities that we're automating into this core because it is structured the way it is," McLean said.
