As artificial intelligence (AI) moves swiftly into the world of banking, Toronto-Dominion Bank decides to get a piece of the action. It does this through the acquisition of AI startup Layer 6. The bank’s been trying for a while to integrate AI into its business model but wasn’t quite sure how to do it, but thanks to Layer 6, the solution is much clearer now.
Layer 6 was founded in Toronto back in late 2016. It uses AI to analyze, learn and predict a customer’s needs. Following the acquisition, the startup still intends to keep its name but will become exclusive to Toronto Dominion Bank.
AI integration is quickly picking up in Canada, with more than $190 million raised in funding for just 22 deals made within the first three quarters of 2017. One such establishment is the Royal Bank of Canada (RBC), which has just set up some new labs dedicated to AI research.
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Both the Ontario and federal governments are also doubling up their efforts when it comes to AI and between them have invested more than $100 million in the research institute named the Vector Institute based in Toronto. Toronto-Dominion Bank and RBC are partners of the institute, while its founders are Layer 6 founders Jordan Jacobs and Tomi Poutanen.
Last year saw Layer 6 win first place in an international competition for the best recommendation system. Since then the startup’s been approached by various companies offering different acquisition prospects from both within and outside of Canada.
Layer 6 currently employs just 17 people, but that’s not bad considering it only formed just over a year ago. The acquisition will help the startup expand its operations to be able to meet customer demand.
“If we go and we raised a ton of money from investors, at some point along the way we essentially stop being a Canadian company even if we’re located here,” said Jacobs. “And for us, this was an opportunity to build inside a global company that is Canadian TD, and help them to leap to the front of the pack around the world in adopting AI.”
It’s still unclear as to just how TD is going to integrate the AI technology into its business model. One way the AI may be used is to detect customer’s spending patterns and offer them products based on this.