A midsize bank that says AI has flipped build-versus-buy: three vendor contracts already replaced, five tiers of AI access, a head of AI and data science, and a COO who counts tokens monthly.
How is Valley using AI?
Valley National Bancorp, a $64 billion bank spanning New Jersey, New York, Florida, Alabama and California, has one of the more candid AI accounts among midsize lenders because its chief operating officer, Russell Barrett, talks about the economics. Ranked No. 47 on American Banker's 2026 Most Innovative People in Finance list, Barrett credits a cloud-first strategy that moved over 80% of data-centre capacity to a cloud hub, a completed core conversion and a four-year push to build a 'data culture' for letting Valley act on AI faster than peers: a data task that takes another bank five months takes Valley five days, digital transformation has produced nearly $100 million of cost savings over four years, about $20 million of recurring fee revenue and more than 100,000 hours of productivity, and more than 50 digital initiatives launched in a year. In July 2026 he said agentic AI had 'upended the build-versus-buy calculus': Valley is already replacing three external software contracts with its own AI-enabled workflows, has reached production on AI prospecting and fraud capabilities ahead of similar-sized banks working with the same partners, and is 'very token-conscious', tracking spend monthly, with five tiers of AI access and about 80 of 3,600 employees as open-access power users. Nickolaus Lachman, head of AI and data science since 2025, builds custom generative-AI agents for Valley's AI Assistant; a new Valley Foundry explores fintech as a primary focus rather than a side lab. The bank's 2026 moves include senior hires for partner banking, digital and customer care, a $247 million agreement in August 2026 to buy Chicago's Providence Financial for a retail footprint there, and technology expenses of $31.9 million in the first quarter, up 7%. On the first-quarter 2026 call CEO Ira Robbins listed AI already in use: a customer-facing voice AI agent that calls past-due auto-loan customers, fraud tools that verify transactions and prioritise suspicious-activity alerts, next-best-offer sales tools, and AI in card service requests, parts of underwriting, risk monitoring and software development. In July 2026 he said banks that adopt AI effectively could cut their efficiency ratios by around 500 basis points, and CFO Travis Lan put year-to-date savings at about $15 million in the expense run rate against $3 million to $4 million of new AI-associated spending; the chief credit officer added that agentic AI is not yet in the bank's core credit analysis. The 2025 10-K describes an AI governance, oversight and strategic facilitation function covering risk assessment of internal and vendor AI, due diligence and model validation. It does not disclose total AI investment.
Lead bank
Valley National Bank
Assets (lead bank, Mar 31, 2026)
$64 billion
Charter
National bank (OCC)
Headquarters
Morristown, NJ
Flagship platform
Cloud-first infrastructure, Valley's AI Assistant and tiered access
AI leadership
Ira Robbins · Russell Barrett · Nickolaus Lachman · Travis Lan · Stephen Schroth · Michael Rappaport
- Build-versus-buy has flipped: 'We are already replacing three external contracts with our ability to leverage AI' (COO, July 2026); AI prospecting and fraud tools reached production ahead of similar-sized peers.
- Foundations: 80%-plus of data-centre capacity moved to a cloud hub, a completed core conversion and a 'data culture' begun four years ago; five days versus five months for data tasks.
- Measured outcomes: nearly $100 million of cost savings over four years, ~$20 million of recurring fee revenue, 100,000-plus hours of productivity, 50-plus digital initiatives in a year.
- Governed access: five AI tiers, two specialised for engineering, QA and model risk; about 80 of ~3,600 employees with open access; spend and token use tracked monthly.
- People: Russell Barrett (COO, ex-BNP Paribas and Bank Leumi CIO), Nickolaus Lachman (head of AI and data science, custom agents for Valley's AI Assistant), the Valley Foundry for fintech exploration.
- AI in production per the CEO (Q1 2026): a voice AI agent for past-due auto loans, fraud and alert-prioritisation tools, next-best-offer sales AI, and AI in card servicing, underwriting steps, risk monitoring and software development.
- The economics (Q2 2026 call): ~$15 million of run-rate savings against $3–4 million of new AI spend; the CEO sees ~500 bp of efficiency-ratio improvement for banks that adopt AI well, about 65% from expenses and 35% from revenue.
- Formal strategy (Q2 2026 deck): centralised AI governance with model-risk focus, an AI team reporting to the head of data and analytics, and a roadmap to an 'AI-native organization' from 2028; agentic underwriting is still in exploration, per the chief credit officer.
- Growth: senior hires for partner banking, digital and customer care (February 2026); Providence Financial in Chicago for $247 million (August 2026); AI used to compete for deposits (Bloomberg, 2025).
- Build-via-buy, too: the $340 million Bluevine acquisition (September 2026) adds ~180 AI and data-science engineers and a platform where, per Valley's own deal deck, the majority of new code is AI-generated and ~80% of inbound customer inquiries are AI-contained.
What is Cloud-first infrastructure, Valley's AI Assistant and tiered access?
Valley's AI sits on a cloud-first strategy that moved more than 80% of its data-centre capacity to a cloud hub, giving what chief operating officer Russell Barrett calls a 'single pane of glass' on data, and on a completed core conversion. Nickolaus Lachman, senior vice-president and head of AI and data science, builds custom generative-AI agents and applications for Valley's AI Assistant under a governance framework. Access is tiered: five levels, two of them for engineering, quality assurance and model-risk staff with specialised tools, and about 80 of roughly 3,600 employees with open access as cross-functional 'power users'. Barrett says the bank is already replacing three external software contracts with AI-built workflows and reached production on AI prospecting and fraud tools sooner than similar-sized peers, while tracking spend and token use monthly. The second-quarter 2026 investor deck sets out the strategy formally: a centralised governance framework emphasising model risk management and data security, role-appropriate AI tools backed by an AI leadership team reporting to the head of data and analytics, a build-and-buy approach fed by Valley Ventures, the technology-banking business and Bank Leumi, and a roadmap from foundations (2023–2025) through 'AI portfolio execution' (2025–2027) to an 'AI-native organization' from 2028.[4][1][2][14]
What has Valley done on AI, and when?
- Sep 28, 2026
Bluevine acquired for $340 million to accelerate the AI roadmap[17][18][19]
Valley agreed to buy the digital small-business banking platform Bluevine for $340 million, adding $2.1 billion of low-cost core deposits, about 175,000 active small-business customers and roughly 180 engineering, product and data-science staff. The announcement and investor presentation frame Bluevine as 'production-grade AI capabilities and engineering talent' built in-house, citing that the majority of Bluevine's new code is AI-generated and about 80% of its inbound customer inquiries are AI-contained; CEO Ira Robbins said the deal would 'meaningfully accelerate our digital and AI capabilities.' Close expected early 2027.
- Sep 9, 2026
Valley Foundry launched; Michael Rappaport to lead[16]
A new technology and innovation capability to speed adoption of AI, cybersecurity and data-and-analytics tools through internal and external partnerships; Rappaport joins from Capco, with earlier innovation roles at HSBC.
- Aug 25, 2026
- Jul 23, 2026
- Jul 23, 2026
Second-quarter 2026 results[10]
Net income $170.9 million; salary expense down on 'resource optimization'.
- Jul 10, 2026
'AI is changing the build-versus-buy question'[4]
Three vendor contracts replaced; five access tiers; token use tracked monthly.
- Jun 1, 2026
COO ranked No. 47 for building an 'AI-ready bank'[1]
Cloud-first, data culture, the Valley Foundry and $100 million of savings.
- Apr 23, 2026
- Apr 23, 2026
- Apr 15, 2026
Head of AI and data science on agent 'fleets'[2]
Lachman's remit: governance to custom applications for Valley's AI Assistant.
- Feb 27, 2026
2025 10-K: AI risk factor and an AI governance function[11]
Valley says it has made and will keep making investments in generative, machine-learning and agentic AI, and has implemented an AI governance, oversight and strategic facilitation function covering risk assessment of internal and vendor AI, due diligence, model validation and controls.
- Feb 11, 2026
Leaders for partner banking, digital and customer care[8]
Rodrigo Suarez, Stephen Schroth and Ed Montesdeoca appointed.
- Mar 19, 2025
AI to compete for deposits[7]
Among regionals using AI on customer data to lure deposits.
- Mar 3, 2025
CFO and commercial leadership set[6]
Travis Lan confirmed as CFO.
Where does Valley use AI today?
| System | What it does | Status | Use case |
|---|---|---|---|
| Valley's AI Assistant and custom agents[2] | Machine learning and custom gen-AI agents built by the AI and data science team. | In production | Generative & agentic AI |
| AI workflows replacing vendor software[4] | Three external contracts for specific workflows being replaced. | Rolling out | Generative & agentic AI |
| AI-powered fraud capabilities[4] | Reached production with partners ahead of similar-sized banks. | In production | Fraud detection |
| AI prospecting and lead generation[4][7] | Helping bankers develop relationships 'in a not-creepy way'; AI used to compete for deposits. | In production | Customer-facing chatbots |
| Five-tier AI access and monthly spend tracking[4] | Specialised tiers for engineering, QA and model risk; ~80 open-access power users. | In production | AI governance (general) |
| Voice AI for auto-loan reminders and collections[14][13] | An autonomous outbound voice agent that holds payment-reminder and collection conversations with past-due auto-loan customers. | In production | Customer-facing chatbots |
| AI knowledge assistants for customer care[14] | Generative AI giving customer-care agents access to approved policies and procedures. | In production | Generative & agentic AI |
| AML and fraud alert actioning[14] | Machine-learning models segment risk, identify wire fraud and reduce false positives in AML alert review. | In production | AML / KYC |
| Automation and agentic AI in underwriting and loan servicing[14][15] | Financial-statement spreading and rent-roll population are automated; agentic AI for underwriting workflow is shown in the deck but, per the chief credit officer, still in exploration. | Pilot | Credit scoring & underwriting |
| AI governance function and risk-factor disclosure[11] | Risk assessment of internal and vendor AI, due diligence, model validation and controls; the 10-K flags errors, bias, unfair treatment and customer-service AI that fails to escalate to humans. | In production | Model risk management |
| Valley Foundry[16] | A dedicated capability to identify, test and advance emerging technologies — initially AI, cybersecurity, and data and analytics — through startup, fintech and vendor partnerships. | Announced | AI governance (general) |
| Bluevine AI-native small-business platform[18] | Acquired production-grade AI engineering: per Valley's deal presentation, the majority of Bluevine's new code is AI-generated and roughly 80% of its inbound customer inquiries are AI-contained; about 180 R&D staff join to accelerate Valley's AI roadmap. | Announced | Generative & agentic AI |
Use-case links open the tracker's rules-by-use-case matrix: which documents govern each system type.
Which AI vendors and fintechs does Valley work with?
| Company | What Valley uses it for | Status | Category |
|---|---|---|---|
| NICE Actimize | Unified AML platform starting with Customer Due Diligence, followed by Suspicious Activity Monitoring and case management, selected March 2017 (no later update found). | Selected | AML compliance |
Each vendor and fintech page cites the source for the relationship, and vendor pages list products, pricing and other bank customers. Compare AI tools for banks by category, or read the fintech and neobank AI dossiers.
What has Valley disclosed in numbers?
| Metric | Value | As of |
|---|---|---|
| Vendor contracts being replaced by AI | 3[4] | Jul 10, 2026 |
| Employees with open AI access / total | ≈ 80 / ≈ 3,600[4] | Jul 10, 2026 |
| Digital transformation results over four years | ≈ $100 million saved; ≈ $20 million recurring revenue; 100,000+ hours[1] | Jun 1, 2026 |
| Data-centre capacity moved to cloud | > 80%[1] | Jun 1, 2026 |
| Technology, furniture and equipment expense, Q1 2026 | $31.9 million, up ≈ 7%[4] | Apr 23, 2026 |
| AI savings vs new AI spend, year to date | ≈ $15 million run-rate savings vs $3–4 million new AI-associated expense[15] | Jul 23, 2026 |
| Efficiency-ratio improvement the CEO sees from effective AI adoption (industry-wide) | ≈ 500 bp (≈ 65% expenses, 35% revenue)[15] | Jul 23, 2026 |
| Valley Ventures capital committed / deployed | $200 million / $80 million[14] | Jul 23, 2026 |
| Capital expenditure, last seven to eight years vs the prior period | ≈ $450 million vs ≈ $50 million[13] | Apr 23, 2026 |
| Providence Financial acquisition | $247 million; $1.6 billion of assets[5] | Aug 25, 2026 |
| Bluevine acquisition | $340 million; $2.1 billion of core deposits; ≈175,000 small-business customers; ≈180 R&D staff[17][18] | Sep 28, 2026 |
| Bluevine: new code AI-generated / inbound inquiries AI-contained | Majority / ≈80%[18] | Sep 28, 2026 |
“We probably are not market-leading in the number of use cases, but we do feel our ability to execute and see it to fruition is definitely something.”[4]
Russell Barrett · Chief Operating Officer · Jul 10, 2026
“Our persistence over the last few years on building a scalable infrastructure sits at the back of every innovative creation or partnership we now benefit from at Valley.”[1]
Russell Barrett · Chief Operating Officer · Jun 1, 2026
“We invested early in AI talent, and continue to devote resources and focus to solutions that can augment the capabilities of our associates.”[12]
Ira Robbins · Chairman and CEO · Apr 23, 2026
“I think like most AI use cases, right, the manual work can be automated, but it doesn't change the oversight and approval and governance that's around those AI efforts.”[15]
Travis Lan · Chief Financial Officer · Jul 23, 2026
“Valley has long operated as a technology-forward bank, investing in differentiated capabilities and fostering a deep ecosystem in this space to better serve our clients.”[16]
Russell Barrett · Chief Operating Officer · Sep 9, 2026
“The acquisition of Bluevine directly advances the strategic priorities we have previously communicated to our shareholders. It is expected to enhance our core funding capabilities, add a proven small business growth platform and meaningfully accelerate our digital and AI capabilities.”[17]
Ira Robbins · Chairman, President and CEO · Sep 28, 2026
Who runs AI at Valley?
Ira RobbinsLinkedIn ↗
Chairman and CEO[9]
Russell BarrettLinkedIn ↗
Chief Operating Officer; formerly chief transformation officer[1][4]
Nickolaus LachmanLinkedIn ↗
SVP, Head of AI and Data Science[2]
Travis LanLinkedIn ↗
Chief Financial Officer[6]
Stephen SchrothLinkedIn ↗
Head of Digital and Assisted Channels (from February 2026)[8]
Michael Rappaport
Head of Valley Foundry (from September 2026)[16]
Which regulators govern Valley's AI?
| Authority | Why it matters here | Documents |
|---|---|---|
| OCC | Valley National Bank is a national bank; custom agents, AI prospecting and fraud models fall under the model-risk bulletin and the gen-AI risk perspective. | OCC Bulletin 2026-13 OCC Semiannual Risk Perspective, Spring 2026 |
| CFPB | AI prospecting and deposit targeting for consumers sit under UDAAP; any AI in lending under ECOA. | CFPB Chatbots in Consumer Finance (issue spotlight, 2023) ECOA / Regulation B adverse action (15 U.S.C. 1691(d); 12 CFR 1002.9) |
| Federal Reserve | Fraud and prospecting partners are third-party relationships for the holding company; replacing vendors with in-house AI shifts the model inventory. | SR 23-4 SR 26-2 |
| NY DFS | New York operations bring the DFS cyber rule and its frontier-model letter into scope. | 23 NYCRR Part 500 DFS Frontier AI Models Industry Letter (May 2026) |
Side by side: SR 11-7 vs SR 26-2 · OCC vs CFPB on AI lending · PRA SS1/23 vs SR 26-2 · all comparisons.
What does the public record suggest about Valley's AI strategy?
Analysis by BankingNewsAI from the sources cited on this page. Observations, not advice.
01
Replacing vendors with AI moves risk from third-party to model risk
Every contract Valley retires with an in-house workflow becomes a model it must inventory, validate and monitor; the tiered access for model-risk staff suggests it knows this.
02
Token-consciousness is a governance metric
Monthly tracking of spend and the reason behind it is the discipline most banks lack; publishing the numbers would turn it into a competitive claim.
03
Execution over use-case counts is the right posture for a $64 billion bank
The COO's own framing, production before proliferation, is what examiners prefer and what investors can measure.
04
Chicago adds a footprint and a systems integration
Providence brings 14 branches onto a cloud-first stack the bank says handles change quickly; it is the first test of that claim through an acquisition.
How is Valley Bank using AI?
Valley runs custom generative-AI agents and an AI Assistant built by its head of AI and data science, uses AI for prospecting, lead generation and fraud, and is replacing three external software contracts with AI-enabled workflows, according to its chief operating officer in July 2026. Access is tiered across five levels, with about 80 of roughly 3,600 employees given open access, and AI spend and token use are tracked monthly.
Is AI paying off at Valley?
Management says so. On the second-quarter 2026 call CFO Travis Lan said Valley had about $15 million of savings in its expense run rate against $3 million to $4 million of new AI-associated headcount and vendor spend, and CEO Ira Robbins said banks that adopt AI effectively could lower their efficiency ratios by around 500 basis points. Valley's efficiency ratio was 52.1% in the quarter and is targeted at 50% or lower as it exits 2026.
What has Valley's digital transformation delivered?
According to COO Russell Barrett's June 2026 profile in American Banker, nearly $100 million of cost savings over four years, about $20 million of recurring fee revenue and more than 100,000 hours of productivity, built on moving over 80% of data-centre capacity to the cloud and a completed core conversion.
- #47 Valley Bank's COO is building an AI-ready bank
- Nickolaus Lachman, SVP, Head of AI & Data Science, Valley Bank (Digital Banking speaker profile)
- Regional bank weighed down by CRE loans goes back on offense
- Valley Bank exec: AI is changing build-versus-buy question
- Valley National Bank to acquire Chicago-area lender for $247M
- Valley National Bank bolsters its C-suite
- Fifth Third Among Banks Using AI to Help Lure Customer Deposits
- Valley Bank Strengthens Leadership Team to Accelerate Partner Banking, Digital Innovation, and Customer Care
- Valley National Bancorp Announces First Quarter 2026 Results
- Valley National Bancorp Announces Second Quarter 2026 Results
- Valley National Bancorp Annual Report on Form 10-K for the fiscal year ended December 31, 2025
- Valley National Bancorp first quarter 2026 earnings release (Form 8-K, Exhibit 99.1)
- Valley National Bancorp Q1 Earnings Call Highlights
- Valley National Bancorp second quarter 2026 earnings presentation (Form 8-K, Exhibit 99.2)
- Valley National Bancorp (VLY) Q2 2026 Earnings Call Transcript
- Valley Bank Launches Valley Foundry, Names Michael Rappaport to Lead
- Valley National Bancorp to Acquire Bluevine Inc., Accelerating Its Digital Small Business Growth Strategy and Meaningfully Enhancing Its Core Funding Capabilities
- Accelerating Valley's National Digital Banking Franchise (Form 8-K Exhibit 99.2)
- Valley National Bank to acquire fintech Bluevine for $340M
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