As the race on Wall Street to deploy artificial intelligence (AI) ramps up, JPMorgan Chase & Co. (JPM) has shown how serious it is about its next-gen tech initiative with another major hire this week. The bank hired Apoorv Saxena, Alphabet Inc.'s (GOOGL) head of product management for cloud-based AI, according to a memo obtained by CNBC.
The senior Google executive will start at JPMorgan on Aug. 31 as head of AI and machine learning services and will also be responsible for leading the firm's AI-powered asset and wealth management technology initiative. (See also: 3 Under the Radar Stocks to Ride AI's Growth.)
Recruiting talent has been an integral part of a larger strategy among traditional financial institutions in order to develop AI for improved and automated services like fraud detection, internal operations and loan approval.
Big Banks Race for Next-Gen Tech
JPMorgan has a tech budget of $10.8 billion for 2018, with $5 billion set aside for new investments, according to CNN. Due to the heavy demand for AI expertise among deep-pocketed tech giants, financial institutions and industrial leaders alike, compensation can reach into the millions of dollars for these positions, according to CNBC. Roughly one third of JPM's recent senior hires have come from outside the finance industry.
In May, the Wall Street bank hired Manuela Vesolo, head of machine learning at Carnegie Mellon University, as its first head of AI research.
Earlier this month, JPM launched a free trading platform called You Invest in efforts to lure customers away from competitors like Charles Schwab Corp. (SCHW) and take advantage of the 47 million customers who already use its mobile and online banking solutions.
"We are always exploring ways to offer our clients faster, better and simpler ways to do business with us," wrote Daniel Pinto, JPM's co-president and head of its corporate and investment bank, in a letter to shareholders in April. "The banks that don't invest will lose ground and will have a long, difficult catchup process." He added that the pace of technological advancement will only accelerate over the next decade, thanks to new developments in AI, robotics, machine learning, distributed ledgers and big data—technology that he says will "shape our future." (See also: How Artificial Intelligence Will Boost These 8 Stocks.)