TD is Using Engagement and Predictive AI to Create Holistic Digital Experiences

Customer experience is everything in the B2C realm. There’s no other way around it. And while many businesses are now meeting customers directly online, the next step is to personalize the journey.

The pandemic has forced many consumers to expect more from the brands they love, which jumpstarted a rapid transformation across nearly every industry. Some businesses were already ahead before the pandemic, and with further investment, they are seeing massive growth in digital engagement. In the case of TD, the bank evolved quickly, creating an opportunity to tap into increased digital engagement and construct the ultimate customer experience.

“Your digital experience is table stakes now, regardless of industry,” says Rizwan Khalfan, EVP, chief digital and payments officer at TD. “The megatrend now is rising customer expectations. You can talk about AI and 5G and other technology, but really, the only thing that matters is how quickly it translates into matching those rising expectations.”

TD saw a chance to take technology and create engagement, and now the bank is bringing it one step further and creating a self-sustaining digital banking ecosystem.

“The megatrend now is rising customer expectations. You can talk about AI and 5G and other technology, but really, the only thing that matters is how quickly it translates into matching those rising expectations.”

Rizwan Khalfan, EVP, chief digital and payments officer, TD

The pandemic will be remembered as a time when every business went digital, but more precisely it is a time when consumers are finding experiences that meet their expectations.

Building a banking experience

As the light at the end of the COVID pandemic comes into view, analysts will undoubtedly look back on these months and years and attempt to extract industry-defining themes to learn from. The obvious is a rise of a “digital new normal,” punctuated by businesses of all sizes exhausting every resource to create innovative solutions that bridge the gap between the traditional physical world and new online standards. While this rush to digitize is definitely something to learn from, it is still a mere plot point on the advancing trend of holistic customer experiences.

Earlier this month, TD released a slew of updates to its digital banking ecosystem, including new features that offer a mobile banking experience that is more personalized than ever before: A low balance predictor can alert customers two weeks before they may encounter money problems, while an upcoming transactions feature provides a list of upcoming bills based on recurring transactions. 

These new updates showcase the power of predictive AI in a banking environment, but the real goal is rooted in increasing engagement to better understand the needs of a user. 

“Well, it’s both really. We’re taking advantage of that engagement we have with customers, and then using that to provide them with actionable insights,” explains Khalfan. “We harness AI to predict our customer’s needs. We can look at a balance two weeks out, then proactively reach out to them, give them a nudge, and inform them of what actions they can take to get ahead of the problem.”

In terms of an overall roadmap, new features like these signal a shift towards planning for pandemic recovery as opposed to pandemic response. TD has already deployed—and seen the benefits of—new investments into digitizing self-serve banking transactions, with over 100% increases in tools such as chatbots. 

In order to continue aiding customers, existing digital tools must become more powerful. Predictive AI is a start, but according to Khalfan, the underlying idea is to unify the entire digital banking experience. 

“The expectations we’re seeing amongst our customer base is rising dramatically when it comes to digital experiences,” says Khalfan. “The notion here is that digital engagement has surged, and expectations have also increased to a point where everything needs to be highly personalized.”

The power of predictive AI

As digital self-serve banking normalized even further during the pandemic, digital advice banking also found its footing. This is the area TD and many other banks are working towards perfecting: take a process like direct investing or mortgage applications and personalize it to a point where it offers the most compelling digital customer experience in the market. 

“For example, take a self-serve action can be fulfilled digitally. If I don’t know how to navigate that, I can tap a button and access real-time help. The industry has done that, and that’s standard,” says Khalfan. “But what’s unique to us and our customers, is they’re asking for advice over digital. In these times where there is economic uncertainty, customers want to know that TD can help make them more confident in managing their financial wellbeing.”

“Digital engagement has surged, and expectations have also increased to a point where everything needs to be highly personalized.”

Rizwan Khalfan

This is a huge opportunity created by a huge boost in digital engagement. If a bank can use intelligent insights and AI capabilities to reach out to customers on a relevant but proactive basis, it establishes “a whole new realm to serve customers in and help them reach their goals,” according to Khalfan.

The power of smooth online advice banking comes directly from a bank’s AI capabilities. TD acquired AI startup Layer 6 in 2017, and since then has used that expertise to underpin many of the bank’s recent innovations. However, a lot of those integrations exist in the back end of platforms (fraud mitigation, for example), but now with the low balance predictor and upcoming transactions tools, TD and Layer 6 have launched their first consumer-facing predictive AI platforms. 

Tomi Poutanen, the co-founder and CEO of Layer 6 and TD’s chief AI scientist, knows that the new predictive AI features exist to drive engagement and build an amazing customer experience. 

“It’s not just about us holding their money showing it to them,” says Poutanen. “You build trust when you create an awareness of a customer’s needs. For us to serve them, we need to be able to proactively anticipate changes and be there when they need us. We want to have those conversations as soon as possible. That’s a service a bank can provide its customers that truly serves their interests.”

TD’s digital banking ecosystem

Awareness of customer needs comes down to simply understanding preferences. Because banks have such a huge range of customers, creating services that hit the mark for every demographic can be a real challenge. So the equation involves using AI to determine what a customer actually likes and uses, then using those preferences to guide customer experience. 

“We still need to respect our customers’ preferences,” says Khalfan. “Not everyone is digitally fluent. We see a huge demand for personalization to actively meet goals, but also to connect all interactions that I may have with the bank. Make sure those interactions, even when I go from digital interactions to face-to-face, are seamless. The connectedness so that when I start a new interaction, it doesn’t feel disjointed from the last one.” 

Banks like TD have collected an immense amount of data on how customers behave, so personalizing preferences and acting on them creates a huge opportunity for downstream applications. 

“AI has eyes on all the data our customers share with TD, and then we can build more and more predictive models to be consumed by downstream apps,” says Poutanen. “When Rizwan [Khalfan] and his team build these services, they need those predictive models to inform the intelligent conversations those apps will have with customers.”

Holistic next-gen banking

Using AI to anticipate the needs of a customer and offer insights that help them navigate their financial wellbeing is a strong use-case to keep customers inside a digital ecosystem. Once a bank has that engagement side nailed down, the next logical step is to expand the ecosystem. And that’s exactly what TD is planning to do. 

Currently, TD has a suite of apps and platforms spread across Canadian and U.S. markets. The GoalAssist app is a direct investing platform, MySpend helps track cash flow, and TD for Me acts as a digital concierge, while other tools like TD Securities and TD Precious Metals deliver highly-specialized services to niche user groups. 

“When you look at all our capabilities, then use AI to understand the experiences that drive engagement … I truly believe that is the next evolution banking.”

Rizwan Khalfan

Understanding that engagement is key to developing a compelling customer experience, TD realizes the next step is to bring its platforms together through AI and the increasing ubiquity of advice banking. This self-sustaining digital banking ecosystem would be capable of understanding preferences across platforms and direct users to new tools that have the potential to earn money, track spending, and increase financial literacy. 

For example, one of TD’s new updates this past month involved using AI to help new direct investing customers by offering a tailored onboarding experience through predictive suggestions and nudges. In the future, the preferences obtained by this process (portfolio aggressiveness, market understanding, etc.) could infer how a TD user interacts with other platforms.  

“We have created all these different experiences that are leading platforms in their own right,” says Khalfan. “And if you overlay this notion that engagement matters, you’re led very quickly to this idea that there’s this engagement ecosystem. Right now, all your experiences are kind of discrete and disparate. So can you use AI to connect them for the benefit of the customer? What’s the value in that engagement throughout the entire life of a customer?”

An ecosystem like this would share preferences between apps, platforms, and TD advisors, and the more a user engages, the more personalized their experience becomes.  

“When you look at all these capabilities we have, then use AI to understand which experiences we can expose to each customer to drive engagement further for their benefit, it’s really powerful,” says Khalfan. “I truly believe this is the next evolution of where banking is going.”