AI transformative for finance but not ready for prime time: RBC’s McKay

TORONTO — Artificial intelligence is already showing its potential in transforming the financial sector, even though it’s still early days, said RBC chief executive Dave McKay on Wednesday.

McKay, who got his start at RBC as a computer programmer 40 years ago, said AI still has too many errors and “hallucinations” or nonsense answers to be relied on in banking services.

“It’s an incredible technology that’s going to transform our business, that’s not ready for prime time,” he said, speaking at a University of Waterloo tech conference in Toronto.

The bank, however, sees huge potential for AI in everything from writing code to helping sales staff navigate complex financial products.

McKay said banks will have to train algorithms in-house to control the data and to make sure systems are trustworthy and accurate.

He said AI is already proving its potential with systems such as Aiden, the bank’s AI-powered trading platform it co-developed five years ago, which has outperformed human traders by 30 per cent.

“It teaches itself. It’s gone through all the volatility of the markets, and recent volatility, and continues to outperform. So the machine can work, teach itself to adjust to complex environments very, very well.”

McKay said that like climate change, AI is creating fear and anxiety as it begins to transform society and people don’t feel in control.

“We’re going to reinvent our society yet again, and that’s going to be a threat and that’s creating fear, fear of change,” he said. 

There’s a similar pattern of uncertainty and fear playing out with climate change, said McKay. 

“We are not in control of our change journey, we don’t have a plan,” he said. 

RBC, which has been the focus of intense criticism for being one of the world’s largest fossil fuel financiers, has also recently launched some initiatives on emission reductions, including one on the agricultural sector.

McKay said that whether AI or climate, it’s a matter of tackling the challenges step by step and scaling up solutions that work. 

“It’s just a matter of getting at it, and going through that process.”

This report by The Canadian Press was first published Nov. 8, 2023.

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Ian Bickis, The Canadian Press