Maksims Volkovs, chief AI scientist at TD's Layer 6, and Luke Gee, the bank's chief analytics and AI officer, stand in the soon-to-be-expanded Layer 6 office in Toronto's MaRS Discovery District.Cole Burston/The Globe and Mail
In 2018, Toronto-Dominion Bank TD-T scooped up artificial intelligence startup Layer 6 Inc. and its team of 17 AI experts testing the nascent technology.
While AI at the time was a futuristic plot point in blockbuster movies, Canada’s second-largest bank was signalling its belief that the technology would one day transform the banking sector.
Eight years later, the promise of AI is taking hold. TD is expanding AI research and development centre Layer 6 from its corner office of MaRS Discovery District – one of Canada’s largest innovation hubs for innovators and startups – to take over the entire floor, filling a hole left when Meta Platforms Inc. moved out.
AI has gone from an experimental concept to a key platform that the bank is using to build tools that will put more products and services into the hands of clients.
Investors and analysts have been eagerly awaiting evidence that AI tools can drive revenue and bolster profits, and banks say they are close to delivering on this goal. TD expects to generate $1-billion in annual value from AI by 2028, with $500-million in annualized revenue generation. Royal Bank of Canada RY-T, the country’s largest bank, expects to generate between $700-million to $1-billion in enterprise value from AI by 2027.
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“We’re going to see more revenue generated out of our predictive models,” TD chief analytics and AI officer Luke Gee said in an interview.
“We can respond to more people more quickly with AI, and that means we can help more dreams come true and support more of our clients when they need us, and that’s what we’re trying to achieve.”
In recent years, progress has been dominated by tools that drive productivity and lower costs by helping employees and customers find information faster.
That is beginning to evolve as global banks vie to harness opportunities to boost their bottom lines through AI. TD is just one example of the Canadian banks that are leaders in the heated race.
In TD’s Layer 6 office, which overlooks Queen’s Park, the bank developed TD AI Prism, a model the bank launched in June, 2025, that predicts the products, services and actions a customer is likely to need in the coming months.
Unlike traditional AI, which can address one service or product at a time, Prism analyzes a customer’s portfolio from multiple angles simultaneously. For example, Prism is more effective at evaluating which type of loan could be best for a customer based on data across their entire portfolio.
Employees in TD’s Canadian personal banking business and marketing use Prism to inform their conversations with customers and personalize promotional messages. Through the tool, relationship managers generate more accurate and timely predictions on which customers will need a credit card, loan or other product.
By using Prism to more quickly analyze the full picture of a customer’s portfolio, an adviser can serve more customers in any given day.
Over time, TD's Gee sees AI moving beyond productivity to drive revenue for the bank.Cole Burston/The Globe and Mail
“There’s a lot of work to be done that makes that conversation even richer,” Mr. Gee said. “There may be a productivity opportunity, but there’s going to be revenue at the end of it.”
The bank is continuing to test the technology, with plans to deploy it in other divisions, including wealth management, insurance and its U.S. division.
TD is investing heavily, planning to increase the portion of its technology budget dedicated to innovation and development to drive business growth to 45 per cent over the next three years, up from 34 per cent.
Once the expansion is complete, about 240 employees will work from Layer 6, ballooning from the current team of 90 staff. Teams from risk, business products, and technology platforms and engineering will move into the office to increase collaboration and bring the employees working on AI developments under one roof.
Leaders are keeping a close eye on AI developments. The expanded office includes a boardroom to host the bank’s chief executive officer and other senior executives at Layer 6.
“The office expansion is driven by the fact that we’re going to be doing more and bigger use cases,” TD chief AI scientist Maksims Volkovs said. “The ambition to drive and lead in AI is very strong from the leadership.”
Last year, Canada’s five biggest banks ranked in the top 30 spots globally for AI innovation, according to benchmarking platform Evident Insights Ltd. RBC and TD nabbed the highest rankings among Canadian banks, placing third and thirteenth, respectively.
During a session at Davos in January, RBC chief executive officer Dave McKay said the bank is spending $6-billion a year on technology, with $2-billion of that budget dedicated to modernizing its operations and developing AI systems and other programs.
The bank has been using AI – a tool called ATOM, a foundational model developed by RBC’s research institute – to improve how it underwrites credit. In the process, RBC has found that it is able to bring on more clients.
By scanning all of RBC’s client and underwriting data, including transaction history, the system makes a more comprehensive assessment of the likelihood of the debt being repaid.
RBC's chief science officer, Foteini Agrafioti, says the bank is using AI to maximize how it lends money to clients. 'It touches our bottom line right away,' she says.Cole Burston/The Globe and Mail
Without adjusting its risk guardrails, RBC has been able to lend more money to more clients.
“We are using more data that the bank already has to better understand risk for our clients, better understand how much credit they can take on safely, and their willingness to take that on,” chief science officer and senior vice-president of data and AI Foteini Agrafioti said.
“It helps our clients meet their financial goals and also serves the business directly. It touches our bottom line right away.”
But much of the AI work across the banking industry is still focused on productivity tools that help staff and clients find information and do their jobs faster. Senior bankers say those productivity gains indirectly result in more revenue opportunities.
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Bank of America BAC-N, which serves corporate and commercial clients in Canada, uses AI in its CashPro banking platform to forecast future cash flow, analyze transaction data and assist with other needs.
More than 70 per cent of the bank’s corporate customers use the platform’s chat function, freeing up the bank’s relationship managers to speak with more customers about more complex requests and opportunities, according to Tom Ellis, head of consumer technology at Bank of America.
“We always get questions on will the need for human interaction ever go away?” Mr. Ellis said. “Will there always be clients that want to talk to their adviser? Absolutely. But we want to make it so that they’re doing it for those most complex tasks.”
Richard Jardim, CIBC's chief technology officer, says the bank has moved carefully in applying AI to drive revenue, acknowledging there are risks.Cole Burston/The Globe and Mail
Canadian Imperial Bank of Commerce CM-T has seen a revenue boost linked to its CRTeX platform, which uses AI to help front-line staff personalize recommendations for clients, according to Richard Jardim, CIBC chief technology and information officer.
Since CIBC’s national launch of CRTeX in October, the platform has helped generate more than $1-billion in new deposits clients, according to the bank.
But Mr. Jardim said banks need to be particularly cautious when ramping up AI-enabled revenue-generating opportunities.
There is more risk in rolling out platforms that churn out loans and other products and services directly to clients.
The banks have governance guidelines aimed at managing AI-related risks.
Last year, CIBC became the first major Canadian bank to sign the federal code of conduct for generative AI, committing to developing ethical AI practices. The lender has generative AI guidelines for all team members and a council to oversee responsible AI adoption across the bank.
“There’s some reservation sometimes for folks to quote the type of revenue growth impact that AI is having or can have, but it has the biggest upside,” Mr. Jardim said.
“We have to be careful with respect to how far we push AI right now, with respect to directly impacting the clients. You don’t want to have any bias in it or the data to be wrong, so we’ve been very careful.”