For a New Take on Customer Data, Look at the Banks

Thanks to technology companies, we have new ways to communicate, new ways to get around, and new ways to buy the things we want and sell what we don’t. We can count on technology companies for hyper-personalization and to create new algorithms to power the latest innovations; but can we count on them to do this without breaking the trust bond?

For the last several years, there has been a focus on how every business is becoming a technology company. And for good reason: technology is reshaping virtually every industry. Banking is no different. For example, TD’s fintech partnerships have helped create the number one mobile banking app in Canada.

What the banking industry is grappling with now is how to graph a legacy of trust onto a new banking backbone powered by technology and customer data. It’s no small task. Many banks have a legacy that’s even older than TD’s 160 years, and with that comes a massive internal technological and cultural transformation. But we see a way forward that not only faces these challenges head-on, but that can power the change that’s needed today and into the future.

Data used to be simply a by-product of our relationships with our customers. Simply put, we collected it and protected it. Now, powered by new technologies like artificial intelligence, banks have an opportunity to modernize their approach to data. At TD, we’re focused on using customer data to develop ultra-personalized experiences, and we have one of the best AI teams in the world helping us do this.

Layer 6, the AI company that we acquired earlier this year, was recently named the winner of the RecSys Challenge – one of the most prestigious competitions within the global AI community – for the second year in a row. The AI teams that took part in this year’s challenge analyzed Spotify’s Million Playlist Dataset that was made up of 1,000,000 user-generated playlists. The teams then developed algorithms to extend the playlists and add songs that were unique to each user’s taste; they used AI to predict what the user would want to listen to next.

We are now applying the same logic and learnings to our mission to help people reach their unique and highly personal financial goals and aspirations. We see lots of different ways to help our customers. What if we could help them understand that based on their current spending patterns, there are early signs that they could face financial distress in the coming years – and then help them make changes. What if customer data and AI could help us create a more personalized investment strategy that makes it easier to meet retirement goals. We are also supporting the desire of Layer 6 to work on AI projects outside banking – like exploring unique and groundbreaking applications within healthcare. As some of the most stable pillars of most economies, we think banks have the duty to think responsibly about data.

Today we are taking a measured approach as we consider how to put that data to work. While being careful may sound like an excuse for going slow, trust can be lost in a heartbeat, and for some technology companies, they’re experiencing that in a very public way. Recent controversies such as Facebook’s Cambridge Analytica data scandal shine a light on the fact that technology companies are not just in the technology business anymore, they’re also in the trust business. This is a business that TD has been in for over 160 years. It’s part of our DNA.

Michael Rhodes is the Group Head, Innovation, Technology and Shared Services at TD Bank Group.