Innovations of the Royal Bank of Canada

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Innovations of the Royal Bank of Canada

Toronto-Dominion Bank has various innovation initiatives such as innovative partnerships, data-lake infrastructure, data-as-a-service initiatives, and artificial intelligence. The Bank of Nova Scotia (Scotiabank) employs a three-pronged approach innovation strategy. The approach includes partnering with fintech firms, venture capital firms, and academic institutions.

1) Toronto-Dominion Bank

  • Toronto-Dominion Bank (TD Bank) is a leading Canadia Bank that employs about 85,000 people and provides its services to about 25 million customers.
  • In recent years the company's Innovation, Technology, and Shared Services team started transforming it into a tech company, a process they called “Googlefication”.
  • TD Bank is also focusing on voice technology, blockchain, and mobile. It has intuitive tools such as TD’s Voiceprint authentication and mobile Touch ID authentication.

Innovative Partnerships

  • TD Bank has partnered with fintech firms and startups. Flybits is an example of a startup that has partnered with TD Bank. Flybits provides software for better app experience.
  • Through the TD Ready Challenge, the bank identifies and supports innovative ideas.
  • The bank has also partnered with Communitech in exploring new technologies geared towards increasing customer experience.


  • The company started by moving from the relational database infrastructure to a Big Data environment.
  • The data-lake infrastructure and data-as-a-service functions enable TD Bank to provide effectively "democratized access to the information it gathers and stores as part of its business". Data gathered included personal data, customer behavior, in structured and unstructured forms.
  • Talend is the company's integration partner. Talend enables TD Bank to "build services that enable value to be quickly extracted from data anywhere in the business". Impal, Hive, Tableau, and Spark are open-source tools used to enable data querying.
  • The data makes it possible to develop tools that allow the bank to provide customers with tailor-made services. The infrastructure makes it possible to create digital services such as MySpend app that are customer-centric. MySpend app TD Bank's customers to track their monthly spending.

Artificial Intelligence

  • TD Bank has also invested in smart and self-learning technology. In 2018, it acquired Layer 6, an AI company that will help it to "build systems that can more accurately predict customer needs". It also has a Twitter chatbot and has adopted Amazon’s Alexa devices.
  • MyTD is TD Bank's "subtle AI" that combs through the transaction history of customers and offers personalized predictions and recommendations.

2) Bank of Nova Scotia

  • Bank of Nova Scotia is currently operating as Scotiabank. Scotiabank has 956 branches with 9.4 million customers.
  • The bank employs a three-pronged approach innovation strategy. The approach includes partnering with fintech firms, venture capital firms, and academic institutions.
  • The ScotiaConnect Mobile Banking for Business app allows CEOs, corporate finance departments, and business owners to use their smartphone to monitor balance sheets and expenses, authorize and send payments, and develop, request and accept account transfers and bill payments. The integrated security token also allows for smooth and safe access to the ScotiaConnect.

Innovative Partnerships

  • Scotiabank is collaborating with top FinTech talent in its digital transformation. The bank has 20 partnerships with Latin America fintech firms.
  • The bank has partnered with NXTP Labs, an "accelerator for FinTech start-ups". The bank aims to advance its strategy in global digital banking.
  • It has also partnered with Viola Group and Team8, technology firms in Israel. Viola Group is a venture fund investment in fintech firms in Israel, North America, and Europe.
  • Team8 is considered "Israel's most prestigious security-focused think tank". The collaboration with Scotiabank is aimed to improve customer experience through its knowledge in cybersecurity.

Artificial Intelligence

  • Scotiabank uses AI for internal operational efficiencies and for consumer analytics and insights. It also makes use of AI for risk decision-making data.
  • The bank's three-pronged approach has led it to insights on the use of AI to "differentiate legitimate users from illegitimate ones", AI provides a key way for Scotiabank to improve its protection against fraud.

Royal Bank of Canada Innovations Effect

Royal Bank of Canada's innovation efforts has improved the bank's profitability and efficiency. The bank's digital banking adoption rate has doubled due to the company's investment in digital transformation.

Effect of RBC's Innovations on Revenue

  • According to Forbes, Royal Bank of Canada's innovation efforts have improved the bank's profitability and efficiency.
  • Royal Bank of Canada's leveraging of artificial intelligence since 2015 has proved profitable. In 2014, the bank appointed David McKay as its CEO. David McKay started his career as a computer programmer. McKay emphasized the importance of AI and made a significant investment in AI.
  • The bank's economic earnings from 2015 have grown faster than GAAP. In 2017 – 2018, RBC's "economic earnings per share have grown by 21%, nearly double the 11% growth in GAAP EPS".
  • The technological innovation of the Royal Bank of Canada has helped it to cut physical capital like bank branches while growing its revenue.
  • Royal Bank of Canada "earns more revenue per dollar invested in its business than any other member of its peer group".
  • Revenue per advisor has nearly doubled from 2010 through 2017. In fact, over that time frame, the total number of advisors grew by 17 percent.

Effect of Innovation on Sentiments Surrounding RBC

  • Sentiments surrounding Royal Bank of Canada by its employees are positive. Employees report that they rated the bank positively because of its "new technologies and collaborative work culture".

Adoption of Digital Banking

  • The Royal Bank of Canada's digital banking adoption rate has doubled due to the company's investment in digital transformation.
  • The bank's 2019 second-quarter earnings "reported that year-over-year digital adoption (desktop and mobile) increased 52 percent and 90-day active mobile users increased 17% from one year ago to 4.1 million".
  • In 2019, RBC's overall mobile sessions rose 26 percent year-over-year from around 56 million to nearly 71 million, active digital users rose 8 percent from about 6.6 million to 7.1 million. The online presence of the bank has also increased.