Adopting artificial intelligence (AI) in Jordanian banks transforms service quality by enhancing operational efficiency, fraud detection, and customer satisfaction. This study employs a mixed-methods approach, combining quantitative analysis (survey data, financial reports) with qualitative insights (expert interviews) to assess AI’s impact. The statistical analysis confirms that AI significantly improves banking services, with fraud detection (mean = 4.5) and response time (mean = 4.3) receiving the highest ratings. Regression analysis highlights that AI adoption (β = 0.62, p = 0.000) is the strongest predictor of improved service quality. Despite these benefits, challenges like customer resistance to AI, privacy concerns, and regulatory gaps remain. To address these, recommendations are proposed: transparent AI decision-making to increase customer trust, AI personalization with strict privacy safeguards, expanding AI-driven financial inclusion in rural areas, and strong regulatory oversight to ensure ethical AI governance. These recommendations will enable Jordanian banks to maximize AI benefits while addressing challenges and providing efficient, secure, and customer-friendly banking experiences. Future research should focus on long-term financial impacts and customer adaptation strategies in AI-driven banking.