TD Bank just bought its first technology firm, Toronto-based artificial intelligence startup Layer 6.
The Canadian banking giant, also based in Toronto, invested an undisclosed amount in Layer 6 to help it “continue to transform itself” in the industry shift from mobile-first to AI-first customer experiences, said Rizwan Khalfan, TD’s chief digital and payments officer. The transaction was completed Tuesday morning.
Banks always say to keep up with competition — which now includes financial startups and retailers as well as competing banks — their best bets are to build, buy or partner with them. But buying is rare: last fall JPMorgan Chase acquired WePay, a small business-focused payments company. In the last three years, Silicon Valley Bank acquired API startup Standard Treasury, BBVA acquired digital bank Simple, Ally acquired trading platform TradeKing.
But bringing in an AI startup, and Layer 6 specifically, whose niche is in personalization and prediction, solves a huge problem for banks as they compete with other industries’ more personalized customer experiences. The ability to anticipate the needs and preferences of individual customers doesn’t exist in banking today, but will be a requirement going forward, Khalfan said. Consumer activity is becoming more digitized everyday and the amount of customer data from digital transactions doubles every two years.