TD cautious about consumer-facing AI
Bank filed over 450 AI-related patents since 2020
TD Bank is taking a conservative approach to AI for consumer-facing operations as it taps the tech for back-end efficiencies.
“We are very knowledgeable about the benefits of the AI and what that might bring,” Christopher Fred, head of U.S. credit cards and unsecured lending at TD Bank, told Bank Automation News. “We are looking through various use cases on how we can serve our customers better, but we’re taking a much more cautious approach to it.”
Machine learning plays an important role within TD’s operations, Fred said, adding that underwriting more effectively and creating custom outreach for customers are two uses the bank is deploying.
While the bank is comfortable tapping the technology internally, it isn’t quite sold on consumer-facing AI yet, Fred said.
AI is risky and could give “wrong information, which can violate some regulations,” he said.
“It’s not just TD, all major banks are being really careful about it and making sure that they have the right controls in place,” he said.
TD Bank has deployed AI in the following ways:
- Virtual assistant for customers; and
“It’s kind of a safer place to play [with AI] for our back-office efficiencies,” Fred said. “There is maybe a degree of conservatism in how we approach the opportunities to face the customer.”
KeyBank is also cautiously approaching AI for consumer-facing operations, as it refines its AI models for accuracy while responding to consumers, Chief Transformation Officer Dominic Cugini said at Bank Automation Summit U.S. 2024 in March.
“I think we’re at least two years away, possibly three, from feeling comfortable enough” to roll out consumer-facing gen AI features and applications, he said.
Despite concerns, TD Bank continues to invest in the technology and has filed 450 AI related patents since 2020, Senior Vice President, Chief Engineer and Chief Architect Licenia Rojas said on TD Tech and Innovation Day in May.
TD reported a Q1 non-interest expense of $1.04 billion, up 4% year over year, driven by higher investments in tech.
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