Big banks invest in AI development

RBC and Scotiabank have partnered with a new initiative to keep talent close to home.

RBC and Scotiabank are among the brands investing in NextAI, a new program for entrepreneurs working on artificial intelligence solutions.

Led out of entrepreneurship-focused non-profit Next Canada, the program will provide funding and support for startups working on commercializing AI offerings. Program participants will receive up to $200,000 in funding and access to both high-end technology and mentorship from business leaders and academics working in the field.

The concept for NextAI came out of brainstorming sessions among entrepreneurs, sponsored by RBC and automotive supplier Magna last summer. Decades of public funding (largely from the Canadian Institute for Advanced Research and The Natural Sciences and Engineering Research Council of Canada) has put the country in a modest leadership position when it comes to AI, says Anthony Lacavera, founder and chairman of Globalive Holdings and co-chair of Next Canada.

That, combined with AI’s incontrovertible role in future innovation, made it the right fit for a dedicated program, he says.

For NextAI specifically, Scotiabank has committed $1 million in funding over the next three years. BDC Capital is also a corporate partner, with IBM Canada, Google and NVIDIA also coming on as technology sponsors, providing hardware, access to technology and services for the startups. To date, total funding through corporate partners has totalled $5.15 million.

NextAI is also an attempt to keep innovation within Canada’s borders and avoid having the best talent leave, Lacavera says. That talent is a reason brands like RBC and Scotiabank are looking outside their own walls and investing (alongside their direct competitors) in programs like NextAI, he says, noting that the top innovators are often going to be the ones starting their own businesses, versus going to work for big brands.

From Scotiabank’s perspective, investing in NextAI aligns with its overall digital transformation strategy, says Michael Zerbs, its EVP and co-head of enterprise technology. The bank has already delved into partnering with startups on AI and machine learning initiatives, working on solutions to seemingly simple problems like dealing with customers who are late paying bills, he says. Through deep learning, it can gain insights into the best way to deal with late payers and avoid ruining the customer experience by communicating in the wrong way, he adds.

“The most important thing to recognize here is that the area of artificial intelligence but, more broadly fintech, is innovating rapidly,” Zerbs says. To keep up, outside perspectives and fresh insights are crucial, he says.

Scotiabank does have its own internally-led Digital Factory and has also invested in partnerships with the University of Toronto and Queen’s University as part of its digital transformation agenda.

For its part, RBC launched RBC Research last October, a practice dedicated to advancements in machine learning and other sciences, based at the University of Toronto and led by inventor and entrepreneur Dr. Foteini Agrafioti (who also contributed to NextAI’s development).