The financial industry, traditionally characterized by grand physical banking institutions, has undergone a profound transformation with the emergence of fintech disruptors, particularly neobanks. These digital-first, tech-driven institutions have redefined banking by integrating artificial intelligence (AI) into their operations. This study explores how AI-integrated neobanks are transforming customer banking experiences. Utilizing a mixed-methods approach, we analyze quantitative and qualitative data from 178 working individuals across various sectors. Our findings reveal that AI integration significantly enhances customer satisfaction, trust, and loyalty, with demographic factors moderating these effects. We discuss the pivotal role of AI in personalized banking services, fraud detection, and customer support, and provide practical recommendations for traditional banks to remain competitive. Additionally, we address concerns about data privacy and security, emphasizing the importance of transparency and robust protective measures. The study concludes by highlighting the need for further research into the ethical implications of AI, long-term impacts, and regulatory frameworks to guide responsible AI adoption in the banking industry.