From Finance to Technology - TD Bank's IA Strategy
TD Bank takes rank as Canada’s second largest bank and is
the tenth-largest bank in North America. TD Bank focuses on retail banking,
employs over 26,000 people and provides its services to about 25 million customers.
Over the last five years, TD Bank has focused on
transforming their businesses technologically – meaning that the bank has
transformed its company from finance to technology. It all started with an idea
that moving to a Big Data environment could bring about a 50-fold reduction in
cost. By moving to this new infrastructure of Big Data, TD Bank effectively
democratized access to the information it gathers and stores as part of its
business. These factors include customer service interaction, transactions and
data-driven insights.
In order to implement this infrastructure, the TD Bank team
asked these questions:
1.
What is the data?
2.
Who can access the data?
3.
Under what circumstances can the access it?
Once these questions were answered, they knew that the
format of their new infrastructure would be suitable and always have the
ability to be found and accessed. The next step in implementing Big Data was
set out what problems the technology needed to be used for. They wanted to go
for “quick wins,” where the objective would be how quickly Big Data could
generate savings through driving efficiencies that are greater than the
infrastructure costs to deploy.
The development of the technological tools enabled the bank
to act on the wealth of data it holds on its customers to be able to offer them
tailor-made services. For example, if the bank knows that a customer is in the
process of a major life event, such as buying a house or having a child, this
data informs them with the products and services they might be offered. These
tools also made it possible for customers to use digital services such as an
app, which allows them to track their accounts on a mobile device.
Layer 6 AI
The capability of this transformation was made possible by
TD’s acquisition of an artificial intelligence startup in Toronto, called Layer
6 AI. Layer 6 was launched in late 2016 and uses AI in its platforms to analyze
a variety of data forms to learn and anticipate a customer’s specific needs. TD
Bank is Layer 6’s sole client and customer. Machine learning is increasingly
being adopted throughout financial services in Canada and TD Bank has paved the
way. Royal Bank of Canada has not only
invested in AI research but has also set up labs in Toronto, Edmonton and
Montreal. Meanwhile, federal and Ontario governments have doubled down on AI
throughout the country’s various research institutes – which both TD Bank and
Royal Bank of Canada are partnered with.
TD Bank’s AI Commitment
Prior to the Layer 6 AI startup, TD Bank has shown
commitment to using automation to improve their customer’s experience through
its Twitter chatbot and their adoption of Amazon Alexa devices to offer voice
banking.
Presently, TD Bank has committed to reversing the trend of
Canadian developers to flock elsewhere, like Silicon Valley. TD Bank joined an
effort, sponsored by the Canadian innovation center Communitech, to bring as
many developers back to Canada as they can. Canadians recently held an event
called ‘Go North’ in Silicon Valley. TD Bank was the only bank that
participated.
“The developers didn’t go to Silicon Valley because they
don’t like the weather in Canada; they went to Silicon Valley because they
thought they couldn’t find the right employers up here,” said Jeff Henderson,
the chief information officer at TD Bank. “Our message down there is no, there
are employers up here like TD Bank. You can come and work at TD and make a
difference.”
Henderson also said that they are being very aggressive in
acquiring new talent and leveraging their skills. TD aims to hire 1,000
technologists this year, including data scientists and artificial intelligence
experts. They plan to recruit 65% of these field experts in other places than a
bank, such as college campuses and of course, Silicon Valley.
The Future for TD
Bank
The next step for TD is to start using
software-as-a-service, or SaaS, applications. These applications will help
people share documents and help the bank adopt agile development methods.
According to Henderson, employees responded to a survey saying that want more
mobility and to be unchained for their desks. That’s exactly what the purpose
of implementing SaaS is.
Another factor of using SaaS is to create a more positive
culture surrounding the employees. With this service they plan to redesign
their work spaces to be more open, have less assigned seating and more team
rooms.
To become a bank of the future TD Bank is using in-house
innovation. The bank has labs in Communitech as well as in Cisco’s Toronto
innovation lab that is used to design and test new products. According to
Henderson, TD Bank is in a test-and-learn phase. The best use case for AI, in
his opinion, is using virtual assistants that better understand the customers
and their needs for the best personalized customer experience. TD Bank is
currently testing some options in this concept.
Click here for more information on intelligent automation in Canada
Sources:
https://www.americanbanker.com/news/td-banks-tech-strategy-for-becoming-a-bank-of-the-future
