TD Bank, Canada’s second largest bank has made a bold move into AI, purchasing Layer 6, a Toronto headquartered AI startup for an undisclosed price.
In what would be an anomaly for the startup market, according to a report in the Wall St Journal, Layer 6 had up until the sale taken no venture money, with founders bootstrapping the business from day 1.
Like many trending areas, AI has been a hotspot for conversations at the C-Suite level, but a sore spot when it actually comes to real investments. According to research, advisory, and consulting firm Celent, the vast majority of AI initiatives are still in the planning and consideration phase.
Banks surveyed in their Understanding the Investment into AI in Banking, 2017 only showed deployments of AI technology in fraud, risk and natural language processing areas. And while 85% of institutions agreed that significant change is on the way in the next 3-5 years, the report found 32% were still not investing in AI projects.
So aside from TD, what banks have launched or are backing AI initiatives?
This is by no means an exhaustive list, but here are some highlights.
TD Bank has The Royal Bank of Canada nipping at its feet. It is behind the Borealis AI institute which has several campuses across Canada.
Wells Fargo has an internal AI team, which it set up in early 2017. Wells Fargo made news back in September when its trading bot AIERA (short for artificially intelligent equity research analyst) went against her creators and human analysts by suggesting analysts put a ‘Sell’ rating on tech giants Facebook and Google. Whether AIERA is a correct contrarian or just plain faulty is yet to be seen, however her creators were quick to point out she’s in test mode. Of course the irony of an AI bot going against Google and Facebook wasn’t lost on many in the industry.
Santander InnoVentures have Pixoneye and Gridspace in their portfolio. Pixoneye’s SDK allows bank apps to use a customers photos on their smartphone to better profile individuals and map out life events. So if you’re taking pictures of your baby bump, and you’re a Santander customer, don’t be surprised if suddenly someone contacts you about upping your life insurance. Gridspace on the other hand plays in the voice space, a hot area thanks to the rise of in home devices. Remarkably, InnoVentures claims 70 per cent of its portfolio companies are now in commercial engagement with Santander Group. So even if the bank led AI isn’t here yet folks, it’s coming.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy.